The Government has yet to decide whether the State will contribute to a civil action to be taken against the men believed by victims' families to have been involved in the Omagh bomb atrocity nearly five years ago.
Speaking last night, a spokesman said that no decision has yet been taken as news of the British government's donation only emerged yesterday evening.
"Members of the Government have an ongoing relationship and dialogue with relatives of the Omagh victims," the spokesman said. "In that context various issues have been raised by the relatives and these are being considered," he said.
The Northern Ireland Secretary, Mr Paul Murphy took the unprecedented step yesterday of providing £800,000 to make up the shortfall in the £1.5 million the families need to pursue their case against five men they allege were involved in the August 1998 "Real IRA" bombing.
The funding for the civil action was hailed as "fantastic, unbelievable news" by Mr Michael Gallagher, whose son, Aidan, was among the 29 people killed in the bombing. Mr Gallagher said it took "an enormous burden off our shoulders".
The money will enable relatives to pursue their claim for £10 million in damages against a group of suspects which includes the "Real IRA" leader, Michael McKevitt, who was jailed for 20 years on Thursday for directing the activities of an illegal organisation.