A former bishop went further and said he had “serious doubts” that Fr James Chesney had been involved in the bombing in a Co Londonderry village, which killed nine people.
The calls for the church to come clean about its failings came after a landmark report concluded that the Government, church and police connived to move the priest, said to be a local IRA leader, across the border to a parish in the Irish Republic.
The Catholic Church in Ireland, led by Cardinal Seán Brady, has already been accused by many, including the Archbishop of Canterbury, of losing “all credibility” over its failure to stop child abuse by priests and to bring the guilty to justice.
Sir Reg Empey, the outgoing leader of the Ulster Unionist Party, said: “The statement made by Cardinal Brady is, unfortunately, entirely inadequate.
“In particular, the absence of an apology to the victims of Claudy falls very far short of what should be expected of church leaders in the exercise of their position of moral authority.”
Mark Eakin, whose eight year-old sister died in the blast, added: “"I just feel so sorry for some of the Catholic people. I feel they've been let down by their church."
A report by Al Hutchinson, the Northern Ireland Police Ombudsman, found on Tuesday that Fr Chesney had been suspected of carrying out the terrorist attack on 31st July, 1972.
But the authorities feared his arrest would further inflame the Troubles, and so an investigation into his activities was halted following secret talks between the chief constable of the Royal Ulster Constabulary, the Catholic Church in Ireland and the Secretary of State for Northern Ireland, then William Whitelaw.
The priest died in 1980, having been safely transferred to Co Donegal, and no one was ever charged over the murder of five Catholics and four Protestants in Claudy.
Following the report, Owen Paterson, the current Northern Ireland Secretary, said: “I am profoundly sorry that Fr Chesney was not properly investigated for his suspected involvement in this hideous crime, and that the victims and their families have been denied justice.”
Cardinal Brady’s statement said: “Throughout the Troubles, the Catholic Church, along with other Churches in Northern Ireland, was constant in its condemnation of the evil of violence.
“It is therefore shocking that a priest should be suspected of involvement in such violence. This case should have been properly investigated and resolved during Father Chesney's lifetime.”
The Cardinal pointed out that the report admits the church had challenged Fr Chesney but he had denied any involvement.
Cardinal Brady added: “The Catholic Church did not engage in a cover-up of this matter.”
Edward Daly, the former Bishop of Derry between 1974 and 1993, told the BBC: “As I have stated many times before, I have always had serious doubts about the long-standing allegations surrounding Father James Chesney relating to the Claudy bombing.
"He died 30 years ago and I am prepared now to leave him to the Lord, the God of justice.
"I have to admit being sceptical of much of the RUC and Special Branch intelligence in the early 1970s and the interrogation techniques and other devious methods by which some such intelligence was acquired.
"Fr Chesney vehemently denied involvement in any kind of IRA activity to me on two occasions, in 1974, not long after I was appointed Bishop of Derry, and again in 1977.”
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