The SDLP is demanding answers from the British government over the involvement of MI5, the British Security Service in the payment and deployment of rogue police agents like Mark Haddock.
Haddock was at the centre a critical report by Nuala O'Loan, the Northern Ireland Policing last week. In fact MI5 funded all payments to Haddock and it continues to provide the funds for all agents working for the PSNI's Intelligence Branch, the successor organisation to RUC Special Branch. It also set the many of the guidelines and provided key areas of training for their deployment.
O'Loan spoke of a systemic failure of intelligence and "culture of subservience" which allowed Haddock to get away with murder.
However Sunday Times has established that this culture was largely established by MI5, which is building a new headquarters at Palace Barracks in Holywood.
Even today MI5 continues to run agents within republican groups and will not be open to scrutiny by the Ombudsman.
Raymond White, a former head of Special Branch in Belfast who had moved on to be head of CID during the period covered by the Ombudsman's report explained how the system worked. White strongly denies claims that the refused to co-oeprate with the Ombudsman't investigation.
He said "there was no budget in the old Police Authority for payments to Special branch informants. There was an amount for your average CID drugs tout but that was audited by the Northern Ireland Office.
The Security Service funds all security intelligence budgets. They didn't hand over money without and audit trail and it was overseen by the National Audit Office."
Senior security sources have confirmed that the same system applies today and that the new Policing Board has no oversight or control of payments to PSNI Intelligence Branch informants.
White went on "they [MI5] would fund Special Branch each year through the head of Special Branch. Actual payments for the intelligence source database were funded by a vote for the Security Services [in the House of Common].
As regional head of Special Branch in Belfast I made applications to the ACC head Special Branch setting out the intelligence used, the operations conducted on it, the outcome or result and then I asked for a reward and incentive for the agent. It would be matched against the degree of risk he took."
MI5 and Whitehall set Special Branch's priorities. White explained "we weren't gathering intelligence at our own behest. We were working to an intelligence requirement that was set at the highest levels in Whitehall. Special branch NI was asked to give its support to the overall intelligence picture. There was always a pressing requirement for Strategic Intelligence on what the internal relationships were within the para-military organisations and what their political objectives were. Each piece of intelligence had to be looked at both in its capacity to advance a criminal investigation and its potential future intelligence use. There was always a balance to be struck between preserving the life of people who are still alive on the one hand and solving crime on the other. It could not just be open disclosure."
These procedures, criticised by O'Loan, were set out in a memo by Patrick Walker in 1981. Walker was deputy head of MI5's Belfast station at the time. He went on to become director general, or overall head of MI5, between 1988 and 1991 when he was succeeded by Dame Stella Rimington.
His report specified that records should be destroyed after operations, that Special Branch should not disseminate all information to Criminal Investigation Detectives and that CID should require permission from Special Branch before making arrests, or carrying out house searches in case agents were endangered. These were all key areas which came in for criticism from O'Loan.
MI5 also trained Special Branch officers in agent handling.
Alex Attwood, the SDLP policing spokesman, said that he and Mark Durkan, his party leader, had asked Peter Hain, the Northern Ireland Secretary about MI5 funding of police functions last Thursday but received no satisfactory response.
Attwood said "MI5 should have had working knowledge, of what was going on around Haddock. The culture and structure of Special Branch were informed by MI5. It wasn't something that arose independently. The faults and wrongs within Special Branch were the creation of MI5. That is the key point. Whatever about individuals got up to within the old RUC it was as a consequence of what MI5 required of them."