The future Sinn Féin Stormont minister was arrested in the Netherlands in 1986 — about three years after the biggest prison escape in UK history — and extradited back to the North to face charges relating to the attempted murder of a prison officer.
Conditions set by the Dutch meant he could not face charges relating to London bombings for which he had already been convicted and was serving life sentences, leading UK officials to cancel the sentence.
Northern Ireland Office (NIO) correspondence from 1986 about Mr Kelly was released by the Public Records Office of Northern Ireland.
A senior NIO official wrote: “With considerable reluctance, however, I accept that the balance of advantage overall lies in our taking Kelly on the conditions offered rather than refusing to take him with the prospect of his then being released in the Netherlands.”
The Maze housed some of the North’s most notorious paramilitary prisoners during the Troubles.
Mr Kelly, now a senior member of Sinn Féin who represents North Belfast in the Stormont Assembly, had been jailed for life in 1973 for the Old Bailey and Scotland Yard bombings.
He was among 38 IRA inmates who fled the Maze in Co Antrim in September 1983. They used smuggled guns and knives to overpower prison staff before hijacking a food lorry and driving to the main gate.
After his capture in Holland, a court prohibited Mr Kelly’s extradition on grounds of his life sentences for explosives offences, permitting it only on the charges of attempting to murder a prison officer, causing grievous bodily harm and certain others.
The NIO official wrote: “I find this case much more difficult.” He added: “If we accept him on the conditions set out by the Dutch Supreme Court, I assume action will be necessary under the royal prerogative to remit his life sentences.”
The royal prerogative of mercy, commonly known as a royal pardon, allows changes in sentences without the backing of or consultation with parliament.
In other documents, the IRA prisoner who oversaw the hunger strikes inside the Maze Prison was to be given a royal pardon for explosives charges. The measure was considered as part of extradition proceedings against the officer commanding in the top security jail, Brendan ‘Bik’ McFarlane, during the 1981 republican protest.
Mr McFarlane also took part in the biggest escape in UK prison history from the Maze in 1983.
An official wrote: “The use of the Royal Prerogative to set aside Kelly’s [and McFarlane’s] life sentences will be extremely controversial and is quite likely to be widely misunderstood, misinterpreted, and misrepresented.”