Tony Blair's Northern Ireland secretary lobbied the Government's senior law officer to ask him not to prosecute a suspect to help boost peace process negotiations, the Hallett report has revealed.
Mo Mowlam raised the case of the "high profile" individual with attorney general Lord Morris in April 1999 as talks on Northern Ireland were about to recommence.
Lady Justice Heather Hallett was asked to review the Government's scheme for dealing with fugitive republicans who had fled the jurisdiction. Her dossier, published yesterday, found "systematic flaws" in the operation of the "unprecedented" system for dealing with on-the-run (OTRs) republicans but concluded it was not unlawful in principle.
The judge said political pressure to resolve outstanding cases intensified following the signing of the Good Friday Agreement in 1998 which largely ended 30 years of conflict and referred to discussions between Ms Mowlam and Lord Morris.
"She asked him to reconsider the case, taking into account the positive effect that an undertaking not to prosecute would have on the Northern Ireland peace negotiations, which were about to restart."
The attorney general made clear that any decision on prosecution would be made independently and in a quasi-judicial manner free from political pressure, the review said.
Lord Morris reconsidered the case - the alleged offence was committed before 1973 - and refused to give an undertaking not to prosecute. To date, that individual has not been given an assurance of no prosecution.
But 187 people were later sent letters of assurance telling them they were no longer wanted by police but not ruling out future prosecutions as part of a deal between Tony Blair's Labour government and Sinn Fein.
The judge said the scheme did not amount to an amnesty.
She added that, while the scheme was not well publicised, and effectively kept "below the radar", it was not secret.
The report said: "Dozens of police officers, prison officers, government officials and politicians must have known that some kind of scheme was in operation by which individuals received assurances.
"However, details of the scheme were not given much publicity and important groups such as organisations set up to represent the interests of victims and their families, and individual victims and family members, remained unaware of the existence of the scheme.
"Even the politically active complain that knowledge of the scheme would have involved considerable work in putting together the pieces of a jigsaw."
The review by Lady Justice Hallett, ordered by Prime Minister David Cameron, identified two other cases where similar errors were apparently made.
Northern Ireland's Chief Constable, George Hamilton, said it was "highly unlikely" the two other assurance letters sent in error would lead to the collapse of future court cases.
The process, begun in 2000, saw names of individuals passed to the Government, most through Sinn Fein. The names were then handed to police and prosecutors to assess their status. A report on each individual was sent back to the Government and, if they were declared as not being wanted, a letter of assurance was then issued to the individuals.
The probe by Lady Justice Hallett followed the high-profile collapse of the case against John Downey, who was accused of murdering four soldiers in the IRA's Hyde Park bombing in 1982.
The prosecution of the 62-year-old was halted at the Old Bailey in February after Mr Justice Sweeney found he had been wrongly sent one of the Government's letters of assurance in 2007 when the Metropolitan Police were looking for him. Police in Northern Ireland were blamed for not flagging this up in the report on Downey sent to the Northern Ireland Office (NIO).
Mr Justice Sweeney decided that Mr Downey's arrest, as he travelled through Gatwick Airport last year, and subsequent prosecution had therefore represented an abuse of process. Mr Downey denied involvement in the attack.
Household Cavalry Lieutenant Anthony "Denis" Daly, 23, died in the explosion in Hyde Park on July 20 1982 along with Trooper Simon Tipper, 19, Lance Corporal Jeffrey Young, 19, and 36-year-old Squadron Quartermaster Corporal Roy Bright.