Loyalists were approached about receiving letters of comfort issued to on-the-runs, it has been claimed.
The controversial government administrative process - which saw almost 190 republicans assured they could return to the UK without fear of arrest - was criticised this week in a report by a Westminster committee.
The Northern Ireland Affairs Committee questioned the lawfulness of the OTR scheme and queried why it only applied to one section of the community.
However, it can now be revealed that loyalists were also contacted about receiving letters.
Former loyalist prisoner William 'Plum' Smith said then Secretary of State Mo Mowlam approached David Ervine on the issue.
"They asked us had we got any on-the-runs, so we checked through our channels," he told the Belfast Telegraph.
"There was uncertainty about it, so we went back to them and told them that we had none.
"But we were aware the Provisional IRA had put in 115 names at the time."
Mr Smith said it was not easy for wanted loyalists to disappear. "In loyalism we had nowhere to run to," he added.
"We couldn't run across the border, we had no channels into the US so anybody we had on the run went to England or Scotland and they were usually captured anyway."
The ex-PUP chairman also dismissed claims from unionist politicians that they were unaware of the scheme. "Everybody knew what was going on," he added. "I find it very unusual that politicians are jumping up and down saying they didn't know - they all knew."
The Northern Ireland Affairs Committee expressed unease about how the scheme appeared to favour republicans.
It said: "We are also concerned that the availability of this scheme to only one section of the community, and even then only effectively at the whim of one political party, raises questions about equality rules in Northern Ireland."
However, Mr Smith's remarks would appear to undermine that conclusion. The OTR scheme saw 187 republicans obtain a document confirming they could return to the UK without fear of arrest as, at the time of sending, there was insufficient evidence to prosecute them. The little-known mechanism was set up in 2000 and ran for around 12 years. It only came to public attention last year when the prosecution of John Downey over the 1982 IRA Hyde Park bombing - in which four soldiers died - collapsed after it emerged he had been sent one of the letters in error, when in fact police in London were actively seeking him.
A judge-led review of the OTR scheme, ordered by the Government in the wake of the court judgment, concluded last July that a "catastrophic" error had been made in the Downey case.
Lady Justice Heather Hallett's probe found the scheme was systematically flawed in operation, but was not unlawful in principle.
However, the select committee's separate inquiry, published last Tuesday, is less certain about the scheme's lawfulness.
The report stated: "It is questionable whether the 'on-the-runs' (OTR) scheme was lawful or not, but we believe its existence distorted the legal process.
"We accept that there was a difficult peace process going on at the time, but believe that there still ha s to be transparency and accountability in government and in the legal process."
MPs concluded that "damage has undoubtedly been done" to public confidence in the justice system.
William 'Plum' Smith is a former Red Hand Commando prisoner and has been involved in loyalism in various capacities for more than 40 years. Convicted of the attempted murder of a Catholic man, he was held in the Long Kesh compounds during the 1970s. He chaired the 1994 loyalist ceasefire Press conference. He was also involved in community work with the Ex-Prisoners Interpretative Centre, and has written a memoir charting his journey from war to peace.