In July 1972 the British army handed £300 in cash to IRA representatives in the Lenadoon area of west Belfast, according to confidential files released in Belfast.
The issue was raised with the Northern Ireland Direct Rule Minister, Mr Paul Channon, by the North Down MP, Mr Jim Kilfedder, on September 10th, 1972.
He cited a claim in a loyalist newspaper that a British officer had paid £300 to the IRA representatives, Mr Seamus Twomey and Mr Seamus Loughran, at a military post in west Belfast, just hours before the IRA's first ceasefire collapsed. The loyalist source described the money as "Whitelaw's Danegeld" and alleged it was handed over "to persuade the IRA to withdraw their mob".
In a letter on the file dated July 11th, 1972, the Chief Welfare Officer for Co Antrim, Mr P.J. Armstrong revealed that on Saturday, July 8th, 1972, he was authorised by the Public Protection Agency at Stormont to provide £300 in cash to Col Tomlinson, the commanding officer of the Lenadoon area.
British army headquarters informed him that the colonel was negotiating with parties in relation to houses at Horn Drive, Suffolk which allegedly had been allocated to 16 families. Mr Armstrong brought the cash to the Royal Artillery post at Blacks Road, Dunmurry where he handed it to Maj Reid. He reported: "Maj Reid told me that he had been given instructions regarding the money, but he did not disclose what these were."
"The possibility of intersectarian conflict had developed on the estate because of the vacant houses in Horn Drive from which Protestant families had moved, mainly as a result of shooting from the Catholic areas in the days immediately preceding the Provisional IRA ceasefire.
"There had been considerable pressure from PIRA that these houses should be given to homeless Catholic families. The atmosphere was tense, and the local commander decided that the families could not be safely moved in, partly because of the fear of violent reaction which had been threatened by the UDA.
"A nasty situation developed by Friday, July 7th, and it was reported that the IRA and UDA were both mustering men in Lenadoon Avenue." In the event, the local commander persuaded both crowds to withdraw on the promise that the UDA and Catholic representatives should have a further meeting on Sunday morning. Confrontation developed, however.
According to the report, "The local commander said much play had been made of the fact that the homeless families were in financial distress, and it was suggested to him by the representatives that £300 would help relieve tension."
In a further note on the file, Brig M.E. Tickell of British army headquarters, Lisburn, informed P.J. Woodfield of the Northern Ireland Office that the money was obtained to provide relief for Catholic refugee families who had left their homes in other parts of Belfast.
He added: "The money was handed by the Adjutant of the Second Field Regiment to Seamus Loughran, who was the Catholic representative negotiating with Col Tomlinson. Col Tomlinson was assured that the money had been given to the families and, in the dangerous and fast-moving crisis of the time, it was not possible to adopt more normal channels."
The brigadier's explanation did not impress Mr Norman Dugdale, permanent secretary at the Stormont Ministry of Health and Social Services, who told Sir David Holden of the Central Secretariat on October 27th, 1972: "One is driven to the conclusion that either the negotiators were conned or that they accepted the IRA's demand as part of the necessary price of agreement."