Families of the victims of the IRA Hyde Park bombing have been awarded legal aid to fund civil action against a suspect.

Relatives of the four Royal Household Cavalrymen who died in the July 1982 blast had multiple applications refused before the Legal Aid Agency (LAA) agreed to fund their case against John Downey on Friday, the Sun reported.

Convicted IRA member Downey was charged four years ago with the murders, which he denied, but the prosecution at the Old Bailey collapsed in 2014.

The case against the Co Donegal man collapsed after it was revealed he had received a written assurance from former prime minister Tony Blair’s government that he was no longer wanted.

The letter was issued under the terms of the controversial on-the-runs (OTRs) scheme.

An LAA spokesman said: “We can confirm that legal aid has been awarded to families of the victims of the 1982 Hyde Park bombing. As with all funding decisions, we reviewed the application in accordance with the information provided and the legal aid regulations.

“Our deepest sympathies remain with those affected by this atrocity.”

The car bomb left in South Carriage Drive killed squadron quartermaster Cpl Roy Bright, 36, Lt Dennis Daly, 23, trooper Simon Tipper, 19, and L/Cpl Jeffrey Young, 19, and injured others as they rode through Hyde Park to the changing of the guard.

Seven horses were also killed as the soldiers travelled from their barracks to Buckingham Palace. Another horse, Sefton, survived with terrible injuries.

Sarah Jane Young, the daughter of L/Cpl Young, told the Sun: “When I heard the news, I burst into tears. It’s the best day I’ve had in years. I only dreamed we’d ever get to this moment, but now anything’s possible.”