Media reports last week suggested that Abdelbaset Ali Mohmet al-Megrahi, who is dying of cancer, would be released on compassionate grounds this week in time for the start of the Islamic holy month of Ramadan.
His lawyers announced last week that he was applying to drop his appeal against conviction, leading to speculation that he could be granted a prison transfer to a Libyan jail -- only allowed if no legal action is pending.
A court hearing on that application is due in Edinburgh on Tuesday.
But The Times newspaper, citing unnamed senior sources, said Monday that the Scottish government appears to have buckled under pressure from Washington and abandoned plans to release him this week.
The unidentified sources told the daily there was now "no chance" that Megrahi would fly home on Wednesday, as it said had been expected.
A spokeswoman for Scottish Justice Secretary Kenny MacAskill said he had not yet made a decision and seemed to indicate it may not be taken this week after he received final submissions on Friday.
"He will make an announcement as soon as possible," she said. "No date has been set for that announcement because he hasn't reached a decision and that is still the position."
Megrahi was jailed for at least 27 years for the 1988 plane explosion over the Scottish village of Lockerbie, which killed 270 people on board the plane and on the ground.
The United States has made it clear it wants Megrahi to stay behind bars until he dies; reports have indicated he may only have a few months to live.
At the same time Libya -- whose ties with the West have thawed since it renounced weapons of mass destruction in 2003 and agreed to compensate victims' relatives -- has warned of serious economic fallout if he is not released.
Libya has the largest proven oil reserves of any African country, much of it still untapped, and British firms including BP and Shell have signed major exploration deals there in recent years, which could in theory be under threat.
As if all those pressures were not enough, MacAskill on Monday faced demands to recall the Scottish parliament from its summer recess to discuss the Libyan's fate.
"The justice secretary needs to explain his actions to parliament," he said.
A spokesman for Prime Minister Gordon Brown refused to be drawn on conversations between the British and Scottish governments over Megrahi.
"Any decision relating to any prisoner within the Scottish prisons estate is a matter for Scottish ministers," he told reporters.
"The US administration are aware of where this issue rests and the UK government's position on it," he added.
Meanwhile, the father of one British Lockerbie victim criticised an intervention by US Secretary of State Hillary Clinton, who spoke to MacAskill to urge him not to release Megrahi.
"The naked intervention of president Clinton's wife in the affair has to be seen as the intervention of ignorance, a voice from the previous regime," Jim Swire, whose daughter Flora died in the bombing, wrote in The Herald newspaper.
"I have tried but failed to penetrate the Obama administration to warn it that there was highly credible evidence they were wrong to believe the Lockerbie issue honourably settled."
Source: AFP Global Edition