Britain has withdrawn proposed legislation to grant an amnesty to on-the-run (OTR) paramilitary suspects in the North.
Northern Secretary, Peter Hain told the House of Commons that originally the Bill to resolve the OTR issue had been vigorously opposed by every party in Northern Ireland except for Sinn Fein.
"Now Sinn Féin is opposed because they refused to accept that this legislation should apply to members of the security forces charged with terrorism-related offences," he said.
To exclude the security forces from the provisions of such a Bill would have been "illogical", "indefensible" and "we would not do it", Mr Hain said.
The Department of Justice confirmed this evening the OTR amnesty in the Republic had been suspended, but no decision has been made to follow the UK's move to scrap the plan.
In a statement the Department said: "When the UK legislation on 'on-the-runs' was published last November proposals for dealing with the handful of cases that might arise in this jurisdiction were announced.
Earlier British Prime Minister Tony Blair's official spokesman said: "The (British) government was prepared to put this legislation through but if no one was going to use it there was no point going through with it.
"I don't expect this legislation per sebut I think the issue in some way is going to have to be dealt with because the issue is there, and the anomaly will therefore have to be dealt with in some way."
Under the process, fugitives who committed offences before the 1998 Belfast Agreement would have been made accountable for their past actions through a special tribunal before being released on licence.
Sinn Féin president Gerry Adams said the decision was a recognition that the proposal was breached a deal agreed at Weston Park in 2001. The inclusion of British armed forces in the legislation was not acceptable to Sinn Fein, he said.
"The two governments should move quickly on issues under their direct control. These include the issue of political policing, the need for an effective truth recovery process, including the case of Pat Finucane and the issue of OTRs," Mr Adams added. He said state violence and collusion was a "more fundamental issue" that must be resolved for progress to be made.
SDLP leader Mark Durkan welcomed the withdrawal of the Bill but warned against any move to recycle it at a later stage.
Democratic Unionist deputy leader Peter Robinson told MPs he was delighted the Bill was scrapped in the House of Commons rather than the Lords.
Mr Hain refused to comment on claims by Ulster Unionist MP Lady Sylvia Hermon that the judiciary in the North were also opposed to the legislation.
The Pat Finucane Centre, which has been campaigning for an independent international inquiry into the murder of the Belfast solicitor and the allegations of security force collusion in the killing, also welcomed the announcement.
It said the legislation had been "fundamentally flawed".
"We welcome the fact that this legislation has been withdrawn and call on the British government to engage in a genuine consultation on the way forward, bearing in mind international standards for truth recovery," it said.
The organisation added that two principles must be applied in any truth recovery mechanism.
"The process must be internationalised - the British government is party to the conflict and cannot define the mechanisms. "The process must be victim-centred and allow for information to be supplied to families."
An emotional meeting between Tony Blair and widows of murdered RUC officers played a part in the scrapping of the legislation, the Police Federation of Northern Ireland believes.
Terry Spence, secretary of the Federation, said the binning of the legislation was "a triumph for common sense and decency".
Additional reporting PA