Notes from a meeting between Alobidi and Scottish Justice Secretary Kenny MacAskill on August 10 suggested the prime minister and Britain's Foreign Secretary David Miliband were opposed to Megrahi dying in a Scottish jail.
The notes, published by the Scottish government, stated: "Mr Alobidi confirmed that he had reiterated to Mr Rammell that the death of Mr Megrahi in a Scottish prison would have catastrophic effects for the relationship between Libya and the UK.
"Mr Alobidi went on to say that Mr Rammell had stated that neither the Prime Minister nor the Foreign Secretary would want Mr Megrahi to pass away in prison but the decision on transfer lies in the hands of the Scottish ministers."
Rammell, now a junior defence minister, said in his response he had made it clear to Libyan officials that the decision on Megrahi was solely one for Scotland, which under its semi-autonomous powers can take decisions on justice matters.
"Neither the Libyans or the Scottish Executive were left in any doubt throughout this entire process that this was a decision for the Scottish Executive over which the UK Government sought no influence," Rammell said.
Scotland freed Megrahi on compassionate grounds on August 20 because he has terminal cancer, prompting fury from the White House and the American relatives of the Lockerbie victims.
The Libyan, the only person to be convicted of the murder of 270 people in the bombing of a Pan Am jet over the Scottish town of Lockerbie in 1988, served eight years of a life sentence.
Other letters released Tuesday showed Britain changed its mind over excluding Megrahi from a prisoner transfer agreement.
Justice Secretary Jack Straw initially believed that Megrahi should not be covered by such an agreement.
But in a letter to Scottish First Minister Alex Salmond dated February 11, 2008, he said he had dropped plans to exclude Megrahi because it was important to develop relations with Libya following its return to the international fold.
"Developing a strong relationship with Libya, and helping it to reintegrate into the international community, is good for the UK," Straw wrote, citing Libya as an "important partner" in fighting terrorism and illegal immigration.
But Straw made clear that Scotland would have a veto over any attempt to move him from jail in Scotland to a prison in Libya.
He wrote: "Given these safeguards I do not believe that it is necessary, or sensible, to risk damaging our wide-ranging and beneficial relationship with Libya by inserting a specific exclusion into the PTA" for Megrahi.
The British government hopes the publication of the letters will counter accusations that Megrahi was released as part of a deal to smooth the wheels of a massive oil and gas deal with oil-rich Libya.
Straw has denied that the negotiations referred to in his letters, which were leaked to a Sunday newspaper, involved any commercial deals with Libya, or that British negotiators ever discussed releasing Megrahi.
Other documents published by the Scottish government included a handwritten note from Megrahi to MacAskill in which he said: "I am unjustly convicted of a most heinous crime."
The letter also told of Megrahi's "sense of desolation". The Libyan continues to protest his innocence.
Britain and the United States condemned the joyous scenes that greeted his return to Tripoli, despite an appeal from the British prime minister in a letter to Libyan leader Moamer Kadhafi to keep the occasion low-key.
The release of the letters come as Kadhafi marked the 40th anniversary on Tuesday of the bloodless coup that brought him to power.
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