Michelle Gildernew said families whose relatives had been victims of alleged collusion between loyalist paramilitaries and members of the Ulster Defence Regiment and Royal Irish Regiment (RIR) were angry at the pay-off.
She said they would have preferred the money, which is being given to full-time and part-time soldiers affected by plans to phase out three Northern Ireland-based battalions of the RIR, to be spent on improving roads, schools and boosting the economy.
“Unionist arguments about the economic implications resulting from the scrapping of the RIR expose the truth about their opposition to progress on demilitarisation,” the Fermanagh and South Tyrone MP argued.
“It is based on unionist self-interest, not the interests of the peace process or the demilitarisation of our society.
“Sinn Féin have argued that demilitarisation should and could release millions of pounds for use on frontline services such as health and education, and to tackle decades of under-investment and neglect, particularly west of the Bann.
“Rather than seek a British Exchequer subvention of millions for the exclusive benefit of the unionist population, I believe that many people in places like Fermanagh and Tyrone would prefer to see this money spent on improving the roads infrastructure, improving local schools and in developing the local economy to the benefit of everyone.”
The battalions are being axed in August of next year as part of a major security scaledown in the wake of the IRA’s declaration last July that its armed campaign is over.
Redundancy deals worth up to £150,000 (€218,590) in some cases are believed to have been negotiated, sources said yesterday.