The Secretary of State is on a collision course with Northern Ireland's top legal adviser after he blasted her decision to reject a fresh probe into the fatal shootings of eight IRA men and a civilian as profoundly wrong.
The SAS shootings at Loughgall RUC station in Co Armagh were among the most controversial of the Troubles.
Theresa Villiers moved to block a new inquest into their deaths, saying such an inquiry could compromise national security.
But Attorney General John Larkin QC, who requested the fresh investigation into the 1987 shootings, condemned the decision.
Mr Larkin's office said: "The Attorney General wishes me to inform you that he considers the Secretary of State's decision to be profoundly wrong in principle and is currently reflecting on the appropriate response to it."
The comments were contained in a letter to the Committee for the Administration of Justice, which investigates controversial deaths.
Ms Villiers was the subject of Mr Larkin's criticism after she stepped in to refer his decision to hold an inquest to the UK Attorney General because she felt the disclosure of related information may be against the interests of national security.
She said: "It is still the same decision about whether to have an inquest, it is just a different law officer who is making that decision."
Mr Larkin had requested the new inquests after the European Court of Human Rights in Strasbourg found the men's human rights had been violated.
Sinn Fein MP Michelle Gildernew accused the Government of denying truth and justice to the families of those killed in Loughgall.
"I agree with the Attorney General's description of this intervention as profoundly wrong," she said.
The IRA men were killed as they approached the station with a 200lb bomb in the bucket of a hijacked digger. A civilian, Anthony Hughes (36), was killed and his brother badly wounded when they were caught up in the shooting. Secretary of State moved to block fresh inquests citing national security concerns.