Justice Minister Alan Shatter ordered the review to establish if any otherinquiry could get to the truth of how the priest died at a lavish wedding in1985.
Fr Molloy died during the celebrations at Kilcoursey House in Co Offaly in July that year and the owner of the house, Richard Flynn, was charged with manslaughter but was acquitted at the direction of a judge.
Judge Frank Roe ended the trial when he accepted a defence submission that there was no evidence to suggest the priest did not die of a heart attack.
An inquest laater found that he died from blows to the head.
Mr Shatter is to appoint a senior counsel to review the three-year investigation by the Garda cold case team after the Director of Public Prosecutions (DPP) recommended earlier this year that no charges be brought.
“I am taking this step solely in the interests of transparency and of bringing the advice of an independent person into consideration of this matter,” the minister said. “I should emphasise that it does not imply in any way that I am dissatisfied with the work undertaken by the Garda Serious Crime Review Team.”
Mr Shatter said he was anxious to put as much information into the publicdomain as possible.
The senior counsel will carry out an independent examination of a report by the Garda cold case unit, the Serious Crime Review Team, to determine what information is of public interest and can be released.
The lawyer will also be asked to identify “matters of significant public concern arising from this examination” and if another form of inquiry could get to the truth.
The justice campaign for Fr Molloy has pressed Garda Commissioner Martin Callinan for answers over why the Garda investigation ended with no charges being brought.
Liz Molloy, Fr Molloy’s niece, has alleged a cover-up over the killing and demanded a public inquiry. She claims it was promised by Mr Shatter and Labour’s Pat Rabbitte before they got into government.
The cleric’s family have claimed that gardaí mishandled the case for almost 30 years, failed to interview vital witnesses properly, if at all, and contaminated evidence.
It has been claimed that the judge in the trial knew the accused.
Mr Shatter said he was happy that the Garda cold case review was extensive, but he said it is not open to him to publish its report.
“First, it is, quite properly, not the practice to publish Garda reports of criminal investigations and, second, the report contains unsubstantiated allegations against named persons,” he said. “I am conscious that to leave the matter at that would allow baseless assertions to be made that the Government has some interest in suppressing information about this case when, in fact, what is at issue is having due regard to the rule of law; the independence of the Office of the Director of Public Prosecutions; and protecting the rights of all.”