By Avril Ormsby
LOCKERBIE, Scotland (Reuters) - A Libyan jailed for the 1988 bombing of PanAm flight 103 over Lockerbie and released two years ago should never have walked free, residents of the Scottish town said on Friday.
Former Libyan intelligence agent Abdel Basset al-Megrahi, the only person convicted for the attack, has now gone missing in Libya, where rebels have overthrown Muammar Gaddafi.
Scottish officials, who released Megrahi on health grounds, said on Thursday they were seeking help from rebel leaders to restore contact with the bomber lost in the "dust of battle."
Megrahi's release and return to Libya infuriated many U.S. politicians and relatives of the 189 American victims, who are now demanding his extradition to the United States. His return to a hero's welcome in Libya embarrassed the British government.
The bomber had been diagnosed with prostate cancer and, when he was freed in 2009, given just three months to live.
"He should never have been released, but there is no point bringing him back," said 66-year-old Sheila Tennant, a retired office worker who has lived in the same house near the Lockerbie Garden of Remembrance for the past 47 years.
Her husband helped staff the makeshift mortuary set up after the airliner crashed into the town of 4,000, killing 11 people on the ground. Her daughter was a civilian in the police force, seeing the names and ages of the dead come through the office.
Tennant said she was not in favor of Megrahi being extradited to the United States: "What's the point? It's done. Life goes on. It's two years now."
Megrahi was convicted in 2001 of playing a "significant part in planning and perpetrating" the bombing. In a special court which sat in the Netherlands, Scottish judges sentenced Megrahi to life in prison with a minimum jail term of 27 years.
Britain's Deputy Prime Minister Nick Clegg has said he would like to see Megrahi back in jail. Prime Minister David Cameron, who took office in May 2010, has called the release a mistake.
However, Scotland has responsibility for its own legal system following devolution in 1999.
As part of the terms of his release, Megrahi was required to submit regular medical reports and check in by telephone to Scottish authorities. He was last in touch with them on August 8.
"I think his release was dodgy -- they should have left him in Scotland to do his time," Sara Lawson, 87, who still lives in the road where a falling wing of the plane and its fuselage demolished her neighbors' homes, told Reuters.
But she said it was too late to bring him back. "The man is old. What can it do?" she said, leaning on a walking stick.\
"He looked like a sick person when he got on the plane (to return to Libya). You would not know he was going to live two years. The end of the Gaddafi regime doesn't change anything."
The houses in her small crescent street have been rebuilt and a small garden with a memorial plaque stands in a corner.
Lawson recalled the "groan" of the plane as it came down that winter's night.
"I was watching TV -- the Muppets were on -- when the whole house shook. Somebody came to the door and said to get out because they were afraid of a gas leak blowing up the house.
"Sometimes I do not think about it, but there is always something to remind you. It was horrendous. You always think there is somebody worse off than yourself, but there weren't that many that night."
Others thought Megrahi should be returned to jail.
"I'd like to see him brought back to Scotland. He shouldn't have been released. I have an open mind on whether it should be Scotland or America, so long as he goes back to jail," said Ian Wilson, 62, a retired contract manager who was not living in Lockerbie in 1988. "He did not serve his time. Life is life."
Peter Shields, 70, a retired sales manager, said: "I think he should die in jail, the way the innocent people suffered."
A Lockerbie couple, who did not want to be named, said parts of the plane had damaged their house.
"You could hear a roar, a spinning, the engines were still going, still throbbing," one of them said.
"It was raining outside, cold and dark. You could feel the crunch as you stepped on bits of the plane... Houses were on fire and there was a huge crater. One house looked just like a children's painting with flames shooting out of the roof."
(Created by Jodie Ginsberg; Editing by Alistair Lyon)