A Catholic priest suspected of involvement in a car bomb attack in a Co Londonderry village in which nine people were killed continued his IRA activities after he had been moved across the Border to Co Donegal, it emerged yesterday.

Despite "significant" police intelligence indicating that Fr James Chesney was responsible for the triple bomb attack in Claudy in July 1972, the priest was never questioned by police on either side of the Border before his death from cancer in 1980 at the age of 46.

Yesterday, senior church figures insisted that the Catholic Church did not cover up the bomb atrocity by moving the rogue priest out of Northern Ireland.

All-Ireland Primate Cardinal Sean Brady said Fr Chesney should have been investigated during his lifetime. He said the church found itself in an "impossible situation".

"He (Fr Chesney) was at all times amenable to the authorities if they wanted to arrest him," said Cardinal Brady, adding: "The Catholic Church did not engage in a cover-up."

The Police Ombudsman's report, 38 years after the atrocity, revealed that senior police officers conspired with the British government and the church to protect the priest.

Relatives of the victims, which included an eight-year-old girl, reacted in shock to revelations by Ombudsman Al Hutchinson that the priest continued his "IRA activities" in Co Donegal following the attack.

Mr Hutchinson said: "The key point to remember here is that the course of action chosen deprived the families -- and Fr Chesney -- the right to a rule-of-law process.

"So while intelligence speculated that he was doing certain things, it was never turned into evidence."

Asked if "certain things" meant IRA activities, he replied: "Absolutely".

Tracey Deans, a grand-niece of bomb victim James McClelland (65), described the revelation as "an absolute outrage".

She said: "If he (Fr Chesney) had been arrested and due process had taken place, lives might have been saved. I would like to know how many other people suffered, how many other people died because of him after Claudy."

Reacting to the report, Northern Ireland Secretary Owen Patterson said the British government was "profoundly sorry" that Fr Chesney had not been properly investigated.

Bereaved relatives are now calling for the 26-page-report to be used as a springboard for a full investigation.

Among the more damning revelations was information that explosive traces had been found in the boot of Fr Chesney's car when he was stopped at an RUC checkpoint in September 1972.

The priest also provided an alibi for an unnamed member of the IRA whose car had been seen in Claudy earlier on the day of the triple attack.

In one police report, the priest was described as "a high-ranking member of the County Derry brigade of the IRA".

Fr Chesney was transferred first to east Donegal and later to Malin Head, following secret talks between then secretary of state William Whitelaw and the head of the Catholic Church in Ireland, Cardinal William Conway.

The two men discussed the scandal after they had been approached by senior RUC officer, who appeared reluctant to arrest the priest because of fears of inflaming what was already a tense situation.

Speaking yesterday, the former Bishop of Derry, Dr Edward Daly, who interviewed Fr Chesney twice, said the priest had assured him he was not involved in the bombings.

He appealed to people who knew the truth to come forward. The Ombudsman also appealed for new information, saying he believed the church had provided all relevant information about Fr Chesney.

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