The British government has stated that it is "very concerned" by Mr Justice Girvan's ruling in Belfast Crown Court yesterday that the "Real IRA" is not listed as a proscribed organisation under the Terrorism Act.
The British government may now appeal the decision, although a leading lawyer and politician, Mr Robert McCartney, said the law may have to be changed to regularise the situation where the "Real IRA" and Continuity IRA are formally outlawed.
Mr Justice Girvan's judgement led to charges of "Real IRA" membership being dropped against four Co Tyrone men yesterday.
This prompted a short statement from a Northern Ireland Office spokesman, who said: "The government is very concerned at this ruling and the DPP is forwarding a report to the Attorney General with a view to an appeal.
"The government is clear that the RIRA should be a proscribed organisation."
Mr McCartney, the Queen's Counsel and leader of the UK Unionist Party, however, said that Mr Justice Girvan had a strong reputation for strict and proper reading of the law.
He said if the judge felt the Act did not provide "clarity and definition on the matter", then this was almost certainly the correct interpretation of the law as it currently stood.
Wearing his political hat, Mr McCartney said it was obvious to the security services in the North and South that the "Real IRA" and the Continuity IRA were terrorist organisations and should be viewed in law as such.
Rather than a British government appeal he suggested that the situation could be changed by an Order in Council in Westminster that would make these organisations illegal.
"I haven't had an opportunity to read the Act in full but an Order in Council may be the speediest way to proceed," he said.
Mr Michael Gallagher, whose son Aidan was killed in the 1998 Omagh "Real IRA" bombing that claimed the lives of 29 people and unborn twins, said he found it "totally unbelievable" that such a ruling should come to pass.
"It sounds to me like the height of incompetence on the part of our lawmakers. It is just beyond belief. How can Dublin get it right, and we can't get it right up here?
"It just seems typical that we falter on the minor matters where the Is aren't dotted and the Ts aren't crossed," he added.
He agreed that rather than appeal the British government should rectify the matter by changing the law.
The "Real IRA" split from the Provisional IRA because of the latter's support for the peace process and the Belfast Agreement.
Several of its members, including senior figures such as Michael McKevitt, were jailed in the Republic.
A similar case was rejected by the Supreme Court in Dublin and dissident republicans continue to be tried under existing legislation dealing with the IRA. On Monday in the Special Criminal Court in Dublin its former director of operations, Liam Campbell - one of five men including McKevitt being sued by the Omagh relatives' group - was sentenced to eight years imprisonment on "Real IRA" membership charges.
He was convicted on two counts of being a member of an illegal organisation styling itself the Irish Republican Army, otherwise Óglaigh na hÉireann, otherwise the IRA.
Mr Gallagher said the British government should adopt the same attitude as applied in the Republic. "It's Óglaigh na hÉireann or IRA and any pseudonym they use after that should be applied."
In yesterday's judgement, Mr Justice Girvan held "that the Real Irish Republican Army is not a proscribed organisation for the purposes of Section 3 of the Terrorism Act 2000". Although acquitted of RIRA membership, the four Tyrone men, Mr Donald Mullan (33), from Firmount Park, Dungannon; Mr Seán Dillon ( 27), of Roughan Way and Mr Kevin Murphy (33), Altmore Park, and Mr Brendan O'Connor (26), of Cavanoneill Road, Pomeroy, all Coalisland, are still on trial accused of conspiracy to murder and possession of a rocket launcher in February 2002.