(Updates with postponement of council ruling) TRIPOLI, July 16 (Reuters) - Libya's top judiciary body has put off until Tuesday a ruling on the fate of six foreign medics sentenced to death for infecting Libyan children with HIV. "The High Judicial Council has put off its decision on the items left from its schedule until tomorrow morning (Tuesday)," state news agency Jana reported, quoting council sources. Jana did not mention the case of the six medical workers -- five Bulgarian nurses and a Palestinian doctor -- as one of the scheduled items but lawyers and officials have said the council was due to rule on it. The foreigners were imprisoned in Libya eight years ago and sentenced to die for infecting 426 Libyan children with the virus that causes AIDS while they worked at a children's hospital in the city of Benghazi. Libya's Supreme Court last week upheld the death sentences, placing the medics' fate in the hands of the High Judicial Council, which is controlled by the government and has the power to commute sentences or issue pardons. "We submitted demands for a full pardon of the six medics," said Othman Bizanti, a leading lawyer for the nurses. The six medics say they are innocent and were tortured into confessing. Some Western scientists say negligence and poor hygiene were the real culprits and that the infections started before the foreign medics arrived at the hospital. Relatives of the children have said the infections were part of a Western attempt to undermine Muslims and Libya. FINANCIAL SETTLEMENT European Union governments are hopeful the six will be set free after successful negotiations with an association of families to reach a financial settlement. Both sides have suggested agreement is close, and Libya has hinted it could free the nurses if an accord is reached. The families have asked for compensation of 10 million euros ($13.3 million) for each infected child's family -- "blood money" under which Islamic law lets victims' relatives withdraw death sentences in return for reparations. Bulgaria and the EU refuse to accept the idea of compensation, which would imply the medics were guilty, but the Union has offered a fund to pay for the children's future care. Libyan officials have said the Council could take several sessions to reach a final decision and will only agree to the release of the nurses if a settlement has been reached in the private talks between the families and the EU. "The Council will take into consideration several factors like compensation, the age and the time spent by the prisoners in jail," Libyan Foreign Minister Mohammed Abdel-Rahman Shalgam told reporters last week. Libya returned to international mainstream diplomacy in 2003 after decades of isolation when it scrapped its programme of prohibited weapons. Washington said last week it was sending the first U.S. ambassador to Tripoli in nearly 35 years, but failure to free the medics could carry a heavy diplomatic cost for Libyan leader Muammar Gaddafi.
