: "There were plenty of booths and quiet corners, but she was standing in the middle of the pub next to a pillar, kissing and hugging the guy.
"She seemed a wee bit on edge but certainly wasn't trying to hide.
"They were snogging away and he was spinning her around. Her arms were around him the whole time and they were taking selfies on her phone."
The loved-up pair left the pub with a takeaway and headed towards Waverley Station holding hands, the local said.
She added: "I knew it was Melissa the moment she walked in."
Melissa has reportedly not been seen out and about much since returning home from a stint in a Peru jail.
The drug smuggler, from Lenzie, near Glasgow, served nearly half of a six-year prison sentence for trying to smuggle £1.5million of cocaine out of Peru.
Her and pal Melissa McCollum, dubbed the Peru Two, claimed a gang forced them to carry the drugs.
Since her release Reid admitted she lied and said she carried the drugs as she thought it would impress pals.
After coming home, she said: "I knew what I was doing. No one forced me. I just wanted to be able to boast about it."
Reid's dad Billy has said "she's just trying to get back to normality".
The ex-con was seen sipping on champagne as she revelled in VIP treatment on her return from the grotty Lima jail.
She was again spotted on Saturday celebrating her birthday in Sportsters bar, where she appeared happy and relaxed.
Reid and McCollum, both 23, were working in bars in Ibiza when they agreed to fly to Peru to smuggle the cocaine in 2013.
Police at the airport found 24lb of the Class A drug in food packages stashed in their bags.
The pair were trying to board a flight to Madrid when they were caught.
McCollum has also been released from prison and returned to her family home in Northern Ireland this month.
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