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British MPs demanded to withdraw from Ireland to let “the Irish get on with butchering each other”, newly-released files reveal.

The dramatic proposal was in response to the killing of two undercover Army corporals at an IRA funeral in West Belfast.

Newly-declassified records, released under the 30-year rule, show the murders of Derek Wood and David Howes of the Signals Regiment provoked outrage among MPs at Westminster.

The two soldiers were surrounded by a crowd when they drove into the funeral cortege of a man who had been killed by loyalist Michael Stone days earlier.

The confidential note – entitled “mood at Westminster” – was written by Irish Embassy official Richard Ryan after he spoke to around 20 MPs of “all shades” days after the murders in March 1988.

The diplomat said many MPs who did not take an active interest in affairs here became “puffed with outrage and conviction” about doing something in response to the killings.

Mr Ryan added suggestions ranged from demands for a tougher and revised policy of policing funerals to a demand for internment throughout Ireland and, in “more cases than previously”, to set a date for withdrawal from Ireland “in order to let the Irish get on with butchering each other”.

Mr Ryan also said people across Britain wrote to their MPs calling for greater action against terrorists.

The two plain-clothed British soldiers inadvertently drove into the path of the IRA member’s funeral before mourners pulled them from the car.

Mr Wood and Mr Howes were beaten before being shot dead by members of the IRA. The killings happened days after the funerals of the three IRA members who were shot dead by the SAS in Gibraltar.

Mr Ryan said after meeting backbenchers at Westminster, he was struck by their exasperation and anger “without any proper sense of how to ventilate it” while there was a resurgence of “frustrated patience” with Ireland.

He added: “The complexity of the issues elude their instinctual approach to policy questions, that of self-interested pragmatism and this further fuels their primary response to events such as last Saturday’s.

"It has to be said no amount of violence toward the UDR, the RUC and Northern Irish or Irish civilians of

any religious persuasion could come anywhere near provoking the same reaction in Britain to Saturday’s killings – and the sort of killings they were – of their own English soldiers.”

Mr Ryan later said there was a risk the Anglo-Irish relationship and the Agreement may be “caught in the net” when MPs look for the reasons behind the murders.

Days after the killings, the Secretary of State Tom King made a speech to the House of Commons in which he described the “horrific events” that shocked the world.

In a separate memo from Mr Ryan following a meeting with Conservative MP Edward Leigh, he said Margaret Thatcher was left “very distressed and very angry” by the deaths.

Mr Leigh indicated MPs held special meetings to call for support for “much tougher and direct action” by the SAS and other special units against terrorists.

And Mr Ryan wrote: “He stressed several times he was not exaggerating the mood generally.”

Meanwhile, British fury at former US president Bill Clinton’s decision to allow Gerry Adams into America has been laid bare in official files.

The Sinn Fein leader was controversially granted a visit to New York to speak at a conference on Northern Ireland between January 31 and February 2 in 1994.

A blistering note from then prime minister John Major’s private secretary Roderic Lyne sent to US national security adviser Tony Lake is part of around 500 Cabinet Office files released by the National Archives in Kew, West London.

It reads: “The movement in which Gerry Adams has long been a leading figure has murdered not only thousands of its own countrymen, but also one member of our Royal Family, one Cabinet Minister’s wife, two close advisers to Margaret Thatcher and Members of Parliament, two British ambassadors – and small children in our shopping centres.”

Mr Clinton took “full responsibility” for the decision which was described as a “difficult matter of judgment” in another file.

Mr Major wrote to the president expressing dismay before the visit.

According to a draft letter, he said: “Tony Lake will, I am sure, have told you how strongly we disagree with the decision to admit Gerry Adams to the United States.”

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