The Scottish government said it has yet to decide on his motion for early release. They are also considering a motion to allow him to serve the rest of his sentence in Libya.
Al-Megrahi was told earlier this year he must drop the appeal against his conviction before he could be considered for a prison transfer to Libya. No transfer can occur while legal proceedings are ongoing.
He would not have to drop his appeal, however, to be freed on compassionate grounds.
A judge is expected on Tuesday to review al-Megrahi's request to drop the appeal.
The Libyan government applied in May to have al-Megrahi repatriated under a prison transfer agreement it has with Britain.
Separately, al-Megrahi applied in July for release on compassionate grounds, claiming he is terminally ill with prostate cancer.
The former Libyan secret service agent is the sole person convicted for the December 1988 bombing of Pan Am 103 that killed 270 people - most of them Americans.
He was arrested in 1991 and held under house arrest in Libya until handed over in 1998 to Britain. He was convicted in 2001 by a special Scottish court set held at Kamp van Zeist in the Netherlands. The current legal action is his second appeal.
Dr. Jim Swire, whose daughter Flora died on Flight 103, said Thursday his greatest fear was that the appeal would be dropped and therefore the truth about the bombing would never be known.
