THE British government denied funding to an industrial complex in west Belfast in the mid-1980s due to concerns that it was linked to the Provisional IRA.
Officials discuss the concerns over Conway Mill off the Falls Road in files newly released from the Public Record Office of Northern Ireland (PRONI).
The decision to withhold funding was announced by Northern Ireland secretary Douglas Hurd in the House of Commons in June 1985, but was first raised by Stormont officials in November 1984.
A memo was circulated to Hurd and officials on the problem of paramilitary connections to community groups benefitting from state funds.
In the report JG Angus of the Central Secretariat at Stormont Castle told ministers: "There is evidence that various community groups are greatly affected or dominated by paramilitary influences."
He said there was a "real possibility of public money being used for paramilitary purposes", and said the issue was highlighted by the case of Conway Community Enterprises based at the Mill.
"The Conway Group is known to have paramilitary connections and recently applied for grant aid from LEDU [the Local Enterprise Development Unit] and an urban development grant from the DOE," he said.
Explaining the government's dilemma, he added: "Assistance would be seen as government funding of paramilitaries whereas refusal of grants would be viewed as discrimination against a legitimate organisation."
The political implications of funding Conway Community Enterprises were discussed in a further memo by official Pat Carvill in January 1985.
He claimed Conway Community Enterprises was generally seen as "a front organisation for Sinn Féin" in the local community.
He said the party's involvement was "part of a deliberate strategy to expand their influence in the deprived areas of west Belfast and to promote their image as an effective and hard-working community-based party".
Government funding, he argued, "would help to legitimise [Sinn Féin] in the eyes of the local community" and provide the party with resources.
"If the project is a success, all credit for creating new job opportunities is likely to accrue to Sinn Féin," he said.
The issue was referred to the head of the Northern Ireland Civil Service Sir Ken Bloomfield who informed officials in February 1985 that Northern Ireland Office ministers were "deeply concerned" about the Conway Mill case.
Following legal advice, Hurd announced in June 1985 in the House of Commons a withdrawal of funding from all paramilitary-linked community projects.
But the matter continued to cause controversy, and reached the US Senate.
In February 1984, chairman of the American Irish Congress Dave Henshaw raised the matter in a letter to Senator LS Riford.
He cited the west Belfast priest Fr Des Wilson who had described the withdrawal of funding from Conway Mill as part of "Britain's policy of de-industrialisation in Catholic areas of NI".
