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Gerry Adams was rumoured to have set up an IRA gang to be ambushed by the SAS, leading to eight Provisionals being shot dead, secret files claim.

The terrorists were killed in May 1987 as they attacked an RUC police station with a 200lb bomb.

British Army special forces were lying in wait for them at the barracks at Loughgall, Co Armagh.

A cleric later claimed that there was a rumour going round that Mr Adams had given the tip-off, files released by the National Archives of Ireland reveal.

(Image: Daily Mirror)

Father Denis Faul told politicians it was said that “the IRA team were set up by Gerry Adams”.

He said two of the gang, Jim Lynagh and Padraig McKearney, “had threatened to execute Mr Adams shortly before the Loughgall event” because they “disliked Adams’ political policy”.

Separate papers claimed Sinn Fein leader Mr Adams was working on a peace policy in early 1987 and saw “armed struggle” as a “political liability”.

(Image: Reuters)

He attended the funerals of the eight dead and carried the coffin of IRA victim Patrick Kelly.

Tests on the IRA gang’s weapons showed they had been used in 40-50 murders, it was claimed.

Mr Adams declined to comment.