Northern Secretary Peter Hain today insisted a republican spying operation had been in operation in Stormont, despite the revelation on Friday that one of those arrested in 2002 was a British spy.
Last week, the North's Public Prosecution Service controversially dropped spy-ring charges against Mr Denis Donaldson, who was Sinn Fein's head of administration in Stormont, and two other men.
But on Friday it emerged that Mr Donaldson had been working as a British agent for 20 years.
In a statement on Friday night, Mr Donaldson admitted his work for the British and said the "spy ring" in Stormont was a "scam and a fiction" created by Special Branch. The controversial raid in October 2002 led the collapse of the political institutions in the North.
Sinn Féin's Martin McGuinness yesterday also insisted the only spy ring which operated at Stormont was run by the British intelligence services.
"It is very, very clear from Sinn Féin's perspective - and I think this is shared increasingly by many other people within our society - that there was a spy ring at Stormont, but it was a British spy ring controlled by securocrats, by people within the establishment who are hostile to the peace process."
But Mr Hain disputed the claim. He told ITV's Jonathan Dimbleby programme: "This is a turbulent event.
"Let us remind ourselves about what happened.
"Something like a thousand documents were stolen from the Northern Ireland Office over which I now preside.
"They appeared in a West Belfast situation. They disappeared. They were stolen.
"The Police Ombudsman, she said they have done not only what was justified but what was absolutely necessary.
"Then events unfolded and the prosecution felt that they could not proceed in the public interest."
Mr Hain is to discuss the matter with Minister for Foreign Affairs Dermot Ahern when the two hold a scheduled meeting in Belfast tomorrow.