DUP MP Nigel Dodds was speaking after he met the Prime Minister on Wednesday.

Mr Dodds was accompanied by Labour MP Andrew McKinlay and Michelle Williamson, whose parents were killed in the Shankill Road bombing by the IRA in 1993.

Earlier this year, Ulster victims' hopes of compensation over terrorist tragedies appeared dashed when Mr Brown indicated in a letter to lawyers representing IRA victims he would be unwilling to seek compensation, despite the US government acting on behalf of American citizens.

The Libyan regime under Colonel Ghadaffi is widely thought to have provided funding and training to the Provisionals at the height of the Troubles.

Semtex originating from Libya is thought to have been used in terrorist attacks in the 1980s and 90s, including the Enniskillen Remembrance bomb.

Last month, in response to a question from Mr McKinlay in Parliament on the issue, Mr Brown indicated he would "review" the matter.

Speaking after lobbying the Prime Minister, Mr Dodds said: "Prior to our meeting today, the message which we had been getting from the government was that there was nothing they could do on this matter. I am pleased that is no longer the case.

"The Prime Minister has indicated that the government will help move the issue of compensation for victims forward."

The North Belfast MP claimed the Provisional IRA could bnot have waged their campaign without the backing of Ghadaffi.

"The Libyans have admitted their guilt in supporting terrorism. The very fact that they have established a $2.7billion fund to compensate American victims of terrorist acts they supported is a clear admission of guilt.

"If the Americans can apply pressure to guarantee compensation for victims, why is our own government selling short victims from all corners of the United Kingdom who suffered at the hands of the terrorists Ghadaffi bank-rolled? That is the message we took to the Prime Minister today," he added.