But he insisted there had been no "double dealing" and told the BBC the UK had "never expressed a different view" to the US over the issue.
He also insisted "no pressure" had been placed on the Scottish government ahead of its decision to release Megrahi.
Tory leader David Cameron has said ministers must be "straight".
Megrahi was freed earlier this month, eight years into a life sentence imposed for his part in the bombing of Pan Am flight 103 over Lockerbie in December 1988, killing 270 people.
The Scottish government, which deals with criminal justice matters in Scotland, said the decision had been made on compassionate grounds, as Megrahi has terminal cancer.
'Explained clearly'
On Tuesday, Scottish officials released documents which included a report that a Libyan official had said Foreign Office Minister Bill Rammell had told them the prime minister and foreign secretary did not want the Lockerbie bomber to die in a Scottish prison.
Mr Rammell has since confirmed he told Libya Mr Brown did not want to see Megrahi die in prison. However, he denied having discussed this with Gordon Brown. Mr Brown has so far declined to comment on the document, but is expected to do so later on Wednesday.
Mr Miliband told BBC Radio 4's Today programme there had been no "double dealing" over Megrahi's release.
He also said: "We did not want him to die in prison. No, we weren't seeking his death in prison. We have been absolutely clear."
Questioned about Mr Rammell's comments, he added: "He was asked by the Libyans whether or not we wanted Megrahi to die in jail.
"He said we weren't actively seeking his death in jail, and he explained very clearly that under our constitution this was a matter of Scottish law, and a matter for the Scottish government."
'Misjudgement'
Conservative leader David Cameron said ministers should have said it was a matter for the Scottish government and kept to the "clear view" there was "simply not room for movement" on Megrahi's release.
He told the BBC it had been a "misjudgement" to "treat in any way with the Libyans about the future of Mr Megrahi".
"This man was convicted of the largest mass murder in British history and if the conviction is in some way unsafe that should be appealed and reviewed but he was convicted of that and they shouldn't have been treating with the Libyans on that basis."
He said the government appeared to have shown the Libyans a "bit of light" and given them the impression the release of Megrahi was something there "could be movement on".
Liberal Democrat leader Nick Clegg said Mr Brown could remain silent for "not a minute longer".
He said: "He really needs, for his own good, to come clean about what he knew and didn't know."
Scottish Justice Secretary Kenny MacAskill allowed Megrahi to be freed from Greenock Prison on 20 August on compassionate grounds after rejecting his return to Libya under a prisoner transfer agreement.
Mr Brown and other UK ministers have declined to say whether they supported freeing Megrahi, stressing it was a decision for the Scottish government.
Mr MacAskill is defending his decision again in a Scottish parliamentary debate.
Opposition parties are expected to unite to defeat the minority Scottish National Party government on the issue.
Other letters made public by the UK and Scottish governments on Tuesday reveal UK Justice Secretary Jack Straw changed his mind about excluding the Lockerbie bomber from a proposed prisoner transfer agreement with Libya.
In a letter to Scottish First Minister Alex Salmond, on 11 February 2008, Mr Straw said Libya had become an "important partner in the fight against terrorism" and was helping to counter illegal immigration.
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