Around 190 Irish republican "on the runs" sent so-called "comfort letters" will be arrested if the police can find sufficient evidence to do so, Northern Ireland Secretary Theresa Villiers warned after a judge-led review found that the letters did not amount to a "get out of jail free card".
Ms Villiers said the review carried out by Lady Justice Heather Hallett found that letters sent to the suspected terrorists in a controversial Government scheme saying they were not wanted by UK police do not give them immunity from prosecution.
She said the Government has been clear that if sufficient evidence emerges, then individual "on the runs" (OTRs) will be liable for prosecution.
Ms Villiers said: "On the central issue of whether the OTR administrative scheme gave suspected terrorists immunity from prosecution, Lady Justice Hallett is very clear.
"She concludes that 'the administrative scheme did not amount to an amnesty for terrorists. Suspected terrorists were not handed a get out of jail free card'.
"The Government has always been clear that if sufficient evidence emerges, then individual OTRs are liable for arrest and prosecution in the normal way.
"So I repeat again today to the people holding these letters - they will not protect you from arrest or prosecution and, should the police succeed in gathering sufficient evidence, you will be subject to due process of law."
Ms Villiers told the House that the report made a number of criticisms about how the scheme operated including "significant systemic failures".
She said: "It was not designed, it evolved. As a result there was no overall policy or responsibility or accountability for it.
"The scheme lacked proper lines of accountability and safeguards. When errors came to light opportunities were missed to rectify them, there was no risk assessment."
The report also criticises the lack of a central register of documents, Ms Villiers added.
In the case of John Downey, she said the report concluded it was not the fact he was sent a letter that caused the trial to collapse but that it contained an "incorrect and misleading statement".
Had the scheme been properly administered, the judge found, Mr Downey would not have received a letter.
According to the report, 13 OTRs received the royal prerogative of mercy between 2000 and 2002. She said Lady Justice Hallett had found two examples of somebody receiving a letter in error in addition to the Downey case.
Ms Villiers said the report found "no evidence" of the Government actively seeking to obscure the scheme from the public.
She said: "I would emphasise very clearly that Justice Hallett has found no evidence that either politicians or officials ever interfered improperly with due process of law or the operational independence of police or prosecutors.
"The report concludes that the scheme did not impact on police investigations into historic terrorist offences."
But, she insisted, the Government accepted all of the report's recommendations and said it would take whatever steps necessary to "remove barriers to further prosecutions".
While recognising it was not her role to speak for the previous Government, under which the scheme was introduced, Ms Villiers said she believed it had at all times acted with sincerity and with a genuine desire to move the peace process forward.
She told the House: "I will say this. I might not agree with every decision they made in relation to the OTR issue but whatever differences of emphasis or approach we might have, I recognise they were dealing with very difficult judgments in very difficult circumstances.
"They were at all times acting with sincerity in seeking to move the peace process forward."
Ms Villiers concluded: "There are many lessons to be learned from this episode, not least the crucial importance of continued efforts to find an agreement on the divisive issues of flags, parading and the past.
"On dealing with the painful legacy of Northern Ireland's past, we need a process which is transparent, accountable and balanced, which puts the era of side deals firmly behind us and can command the confidence of all parties of the community.
"The Government remains fully committed to working with all parties in Northern Ireland in their efforts to deliver that important goal."
Shadow Northern Ireland secretary Ivan Lewis said the Opposition also accepted the full findings of the report, which he stressed made clear the scheme was "not unlawful".
He said: "Most importantly, she states categorically on the very first page of her report that this administrative scheme was not an amnesty nor that it ever amounted to a get out of jail free card.
"We do not believe amnesty is the right approach to dealing with the past in Northern Ireland."
But he said he acknowledged the concerns of politicians and others who feel they should have been given more information about the nature and application of the scheme.
Mr Lewis also asked Ms Villiers if she could give the House any more details about the two cases identified where letters issued may have contained errors.
He also urged her to update the House on what steps had been taken in relation to them, as well as on the other inquiries - by the Police Ombudsman and Police Service of Northern Ireland - that were commissioned in February.
Former Northern Ireland secretary Owen Paterson said there was not a "whiff of a hint" that the letters amounted to an amnesty and if there was the Government would have stopped it immediately on taking office.
Mr Paterson said: "I confirm emphatically, as Lady Justice Hallett did, that when we took power in May 2010, if we felt there was a whiff of a hint that there might have been an amnesty involved, we would have stopped the scheme immediately.
"There were a small number of cases remaining and I was content that there was no question at all of an amnesty and I'm very pleased to see that Lady Justice Hallett has confirmed that."
Labour former Northern Ireland secretary Peter Hain said the review showed that he and other ministers did not mislead anyone over the letters.
Mr Hain said: "Do you agree that this exemplary report has shown victims who suffered and continue to suffer so much that this scheme was not unlawful, it was not an amnesty, it was not a get out of jail free card and it did not offer immunity from prosecution?
"That no minister involved misled anybody and although the scheme was sensitive it was not secret.
"Can I put it directly to you now that you have a responsibility to take this process forward, to learn from the report, to bring all the parties together, this cannot be left simply to the Northern Ireland parties, that both the British government and the Irish government need now to move forward together with the parties and address this past which continues to haunt Northern Ireland and all of the victims who suffered."
But Ms Villiers said she and her predecessors should have been more transparent about the scheme.
Replying to Mr Hain, she said: "There are concerns about the disclosure relating to the scheme, I think it would have been far better if I and my predecessors had been more transparent about the way this scheme operated."
Northern Ireland Affairs Select Committee chairman Laurence Robertson said the letters scheme has created a "very worrying situation" in Northern Ireland in terms of bringing people to justice.
The Tory MP said: "The report actually when one looks below the headlines is very critical of what went on.
"Lady Justice Hallett refers to evidence given to the select committee by assistant chief constable Drew Harris who said that 95 of the individuals who received letters are linked in some way or other to 200, he's since corrected that to 295, murder investigations, though that linkage may only be in intelligence.
"If that intelligence turns to evidence on any of those people, it's rather worrying that Lady Justice Hallett says 'it is not clear to me what would happen if fresh evidence should come to light. It is arguable that this does not sufficiently provide for a change in circumstances'.
"Hasn't this scheme and the way it's been run created a very worrying situation in Northern Ireland with regards to bringing people to justice and bringing closure to the victims who we quite rightly remember today?"
Ms Villiers replied: "You are absolutely right. The report has some very serious criticisms of how the scheme was operated and these have very difficult consequences that need to be dealt with but I would assure the House that the Government is determined they will be dealt with.
"I would refer back to Lady Justice Hallett's conclusion that these errors can be corrected and we will do everything in our power to ensure that they are corrected acting on the basis of advice of lawyers, prosecutors and police."
The Democratic Unionist Party's leader in Westminster, Nigel Dodds, said the letters were in effect an amnesty for John Downey, who was accused of murdering four soldiers in the IRA's Hyde Park bombing in 1982.
The prosecution of Mr Downey, 62, was halted at the Old Bailey in February after Mr Justice Sweeney found he had been wrongly sent one of the Government's letters of assurance in 2007 when in fact the Metropolitan Police were looking for him.
The judge decided that his arrest, as he travelled through Gatwick Airport last year, and the subsequent prosecution had therefore represented an abuse of process. Mr Downey denied involvement in the attack.
Mr Dodds said: "This was a shameful episode in the history of the so-called peace process.
"The grubby deal that was done between the Blair government and Sinn Fein and the republican movement is one of the worst examples that we have come across in terms of political chicanery.
"There was no parliamentary or public approval and at times Parliament was deliberately misled.
"Lady Justice Hallett concludes no general amnesty. Certainly, as far as our party is concerned and the parties in Northern Ireland, there's no question of any amnesty, immunity or exemption for prosecution ever being acceptable whether through legislation or through the back door.
"However for John Downey and it appears now two others a possibility. The fact was that it was an amnesty for them."
SDLP leader Alasdair McDonnell said Northern Ireland's past must be dealt with properly or old problems will continue to surface and threaten the country on a regular basis.
He said: "For me, this whole Downey saga is a sad saga because it's written with ambiguity, limited information and half truths, with no thought or respect for the victims.
"We built a hard-won peace process on truth and honesty with a very welcome political process that flowed from it.
"The sad saga brings us back to one salient point that must be made again and again - we have neglected, and all of us are guilty in this, to deal adequately with the past and the many issues and problems that arise from our difficult history between 1970 and 1998.
"The legacy of the past is in whatever form we take, whether it's the mistakes of the past, the crimes of the past, the murders of the past or the maimings of the past, all hang over us like a massive Alpine glacier, leaving behind the hundreds, indeed thousands, of victims.
"Do you accept that unless the problems of the past are faced up to, and faced up to honestly, transparently and in an accountable and balanced way, they will continue to break off bit by bit and threaten us on a regular basis, month by month, destructing lives and re-opening old wounds?"
Ms Villiers said that despite the conclusions of the review it will be virtually impossible to lift the stay on Mr Downey's case.
In response to Tory Philip Hollobone (Kettering), she said: "I'm afraid the legal advice is it's virtually impossible for there to be circumstances to arise where that stay could be lifted so I'm afraid that decision is irreversible."
Ms Villiers also apologised, saying the Government is "profoundly sorry" for the collapse of the Downey case and the aftermath.
She said: "I would like to repeat the apology that I gave in March for what has happened.
"The Government is profoundly sorry for the hurt this case has caused to all victims of terrorism."