The public finances were in such a poor state in 1987 that "Bord Snip" was set up to identify areas to make cuts.

Minister for Finance John Bruton advocated the withdrawal of Irish troops from Lebanon to save money.

A proposal to introduce a property tax was dismissed as "politically this appears to be a dead duck!" according to the State Papers that offer a behind closed doors view of Ireland in 1987.

And after the SAS killed eight IRA men in the Loughgall ambush in Armagh, Tánaiste Brian Lenihan Snr warned the British authorities to "avoid triumphalism" about the incident.

Conor McMorrow, Edel McAllister and Mícheál Lehane of RTÉ's Political Staff trawled through the confidential State Papers, which have been kept under lock and key for 30 years until now.

Read: Part One of the State Papers

16. The Loughgall ambush

Eight IRA men were shot dead in the ambush
Civilian Anthony Hughes died when he unknowingly drove into the area

On 8 May 1987 the Provisional IRA suffered its greatest loss of life in a single incident in the Troubles.

An eight-man IRA unit launched an attack on the RUC police station in the village of Loughgall, Co Armagh.

An IRA man drove a digger, carrying a bomb, through the perimeter fence of the barracks.

The bomb exploded and destroyed much of the large barracks. The rest of the IRA men arrived in a van and fired on the building.

But soldiers from the British Army’s Special Air Service (SAS) were lying in wait of the attack and returned fire from the base and hidden ambush positions in the area.

Eight IRA men and civilian Anthony Hughes, who unknowingly drove into the area, were shot dead in the ambush.

A large swathe of the documents released today, make reference to the Loughgall incident.

At the time it was reported that there was a "mole in the IRA" that tipped off the security forces about the impending attack.

A document released today by the Department of Foreign Affairs shows that Fr Denis Faul said there was a rumour doing the rounds that "the IRA team were set up by Gerry Adams himself."

Fr Faul was "intrigued" by the theory. A spokesperson for Sinn Féin has today told RTÉ that "these claims are utter nonsense".

After the attack Fr Faul was publicly critical of the attack. He asked whether the security forces could not have arrested the IRA men beforehand?

A Department of Foreign Affairs document dated 19 May shows that Fr Faul felt "the IRA cut the ground from under him with their statement denying that a 'mole' assisted the security forces." 

His public criticism of the British security forces was "entirely dependent on the thesis that the security forces had accurate foreknowledge of the attack."

The day after the attack the Tánaiste and Minister for Foreign Affairs Brian Lenihan Snr claimed it was a further example of "the futile acts of violence of the Provisional IRA."

He said the government rejected the "warped policies" of the IRA.

He blamed the IRA leadership trapping young people into a cycle of violence and putting their young lives at risk.

Letters released today show there was a backlash from the Fianna Fáil grassroots, some Catholic clergy and some Irish people in Britain over Minister Lenihan’s remarks.

Much of the backlash revolved on whether the SAS should have asked the IRA men to surrender before shooting them dead.

In the week after Loughgall, the Tánaiste wrote to Tom King, the Secretary of State for Northern Ireland, where he asked the British government to "be mindful of the need to avoid any sense of triumphalism on the part of your authorities."

He called for sensitivity to be shown during the IRA funerals and asked that the investigation pay particular attention to the question of whether such a large number of fatal casualties could have been avoided.

A letter back from the Secretary of State to Mr Lenihan on 20 May stated that the ballistic tests from the IRA men’s weapons used in Loughgall show the weapons "were responsible for every single murder and attempted murder in Fermanagh and Tyrone this year and indeed further afield as well. You will recall that the murders in the area have included three civilian contractors as well as UDR and RUC victims."

He added: "Since the IRA generally prefer a particular weapon to be used by the same person, and taking account of other intelligence, my advice is that group had at least 40-50 murders to their score over the years."

He concluded that five members of the security forces in the Loughgall station at the time of the time attack "only narrowly survived both the bomb and machine gun attack."

17. Property Tax proposal labelled a "dead duck"

In January 1987 a Department of Finance letter labelled ‘Secret’ gave a stark insight into the perilous state of the public finances.

It warned that "the inescapable reality of the situation is that the 1987 budget proposals will add more that £2 billion to our national debt which stood at a crippling £24.3 billion at the end of 1986."

The Department warned that the government could not afford to contemplate a budget overrun in 1987.

Documents relating to the funding of local authorities released today state: "The most obvious thing to do would be to introduce a meaningful system of local property taxation."

"Politically this appears to be a dead duck, no matter what the outcome of the election and even if it were to be contemplated, general government taxation would inevitably be reduced in some format so there would be no gain to the Exchequer."

18. Larry Marley’s funeral

In the 2017 movie ‘Maze’ about 38 IRA prisoners escaping from the Maze prison in 1983, Dublin actor Tom Vaughan-Lawlor plays republican Lawrence ‘Larry’ Marley in the lead role.

Although Larry Marley was involved in organising the Maze escape, he did not participate in it as his release date was coming up.

He was released in 1985 and two years later he was shot dead by the UVF on 6 April 1987 at his home in Ardoyne, north Belfast.

A large volume of documents released today refer to Mr Marley’s funeral. The funeral was delayed for three days due to a dispute between republicans and the RUC over the use of military displays beside the coffin outside the deceased man’s home.

Larry Marley's funeral finally went ahead after negotiations between the RUC and Catholic priests

Department of Foreign Affairs' documents detail that after negotiations between the RUC and priests at Clonard Monastery it was agreed that the police would allow the coffin and family room to move freely.

"However, on the Monday and Tuesday between the manipulation of Sinn Féin/PIRA and the heavy-handedness of the RUC, the funeral was brought to a halt and eventually abandoned."

"During those two days, the affair developed into something of a cause celebre and by the third day, after two nights of violence and intimidation in west Belfast, the funeral cortege, its ranks swollen to ten times their original number, was finally permitted to go ahead."

The documents state the funeral finally went ahead due to successful negotiations between the RUC and four Catholic priests.

They are scathing of Sinn Féin and the IRA "who had orchestrated the affair and manipulated the situation so there were continuous and violent clashes between the mourners and the RUC."

They also remark that the saga was "something approaching a disaster for nationalist-RUC relations. Sinn Féin and the IRA have had the biggest propaganda coup since the 1981 hunger strikes."

Secret Department of Foreign Affairs' notes of a meeting with Bishop of Derry Edward Daly, show the Bishop believed Martin McGuinness was involved in orchestrating the postponement of the funeral "in order to heighten tension".

Gerry Adams was abroad at the time.

Notes of a meeting with Fr Hugh Sharkey, one of the four priests who mediated between the family and the RUC, show that Sinn Féin put pressure on the Bishop of Down and Connor, Cahal Daly, to appear at the Marley home.

In a phone conversation with the Bishop’s secretary on the Monday evening, Martin McGuinness said: "We have the body and will keep it for a week, if necessary, until the Bishop speaks."

Notes from meetings with the SDLP show the party’s west Belfast candidate, Dr Joe Hendron believed the RUC handling of the Marley funeral damaged his electoral prospects.

Notes from a meeting from South Down SDLP candidate Eddie McGrady show he believed the RUC were "incredibly stupid" in their handling of the Marley funeral, which was "another major propaganda coup for Sinn Féin."

In an account of the Anglo-Irish Intergovernmental Conference in April 1987, Minister for Justice Gerry Collins asked the RUC Chief Constable John Hermon: "Do you think that you won at the Marley funeral?" The Chief Constable replied: "We won one-third and we lost two-thirds."

19. Cabinet tensions over sending AnCO trainees to Paris

Plans to send trainees from AnCO - then the State training agency - to refurbish the Irish College in Paris had members of the Fine Gael cabinet at loggerheads.

Then Foreign Affairs Minister Peter Barry was an enthusiastic supporter of the project and had written to fellow cabinet ministers seeking financial backing.

The cost to AnCO would be £IR63,680 he told then Finance Minister John Bruton, and stressed the benefit of "the experience to be gained by the trainees working in Paris, not to mention the benefit to Ireland of a restored college".

However with the nation’s finances under massive strain and unemployment hitting almost 17%, Mr Bruton was less than enthusiastic.

He wrote back to Peter Barry in March that year to tell him that "the whole matter is still far too vague to enable me to take a decision on it".

"The government is being asked to put up taxpayers' money to support a project whose purpose and full cost is, to say the least, ill-defined," was his blunt assessment to his fellow minister.

John Bruton’s predecessor in finance Alan Dukes had been equally sceptical of the project.

Alan Dukes was sceptical of sending AnCO trainees to Paris (RTÉ Stills Library)

Another letter in the file from Mr Dukes to then Labour Minister Ruairí Quinn told him he took a "somewhat jaundiced view" of the proposal, given that AnCO were planning to reduce training by 25% unless they got more money’.

Minister for Labour Gemma Hussey, whose department was responsible for AnCO, was also uneasy about the financial implications of sending a group of Irish trainees to Paris.

She wrote to Minister Barry explaining that AnCO had not been given any funding increase for 1987 and that it "may have less funds available for actual training when provision is made for inflation, salary increases etc".

Just days before the Fine Gael government fell, Taoiseach Garret FitzGerald overruled his finance minister and approved the trip to Paris.

However he warned the chair of the Friends of the Irish College in France committee in a letter that the approval of funding "didn’t imply any commitment to expenditure in further years".

Correspondence later in the year showed the new Fianna Fáil Finance Minister Ray MacSharry eventually gave the project the go ahead, subject to strict conditions and spending limits.

20. The first "Bord Snip" decides what to cut

As the State coffers were in poor health, Taoiseach Charlie Haughey and Minister for Finance Ray MacSharry set up the Expenditure Review Committee in 1987 to recommend ways of making cuts in State spending.

The committee comprising senior civil servants Bob Curran and Sean Cromien and private sector economist Colm McCarthy was dubbed "An Bord Snip".

Documents released by the Department of Finance today show the government gave serious consideration to withdrawing from the European Space Agency (ESA) in 1987.

A member of the ESA since 1975, the Department of Industry and Commerce proposed Ireland’s withdrawal to save £3.8m annually even though the ESA awarded contracts valued at £7.2m to Irish firms.

The government agreed to look into imposing a levy on these firms as a contribution to the cost of Ireland’s membership of the agency.

The Department of Finance believed the ESA contracts represented "unjustifiable feather bedding for the firms concerned."

But Ireland’s ESA membership has meant that since 2000, over 80 Irish companies have secured ESA contracts exceeding €80m in value.

A June 1987 letter from Colm McCarthy to his "Bord Snip" colleague Bob Curran recommended merging the research units of the Economic and Social Research Institute (ESRI), National Economic and Social Council (NESC) and the Institute of Public Administration (IPA), or assigning them to UCD or Trinity College.

Critical of the ESRI he acknowledged it was crucial for getting economic research going in the 1960s but "it is now responsible for a dwindling proportion of the available economic capability."

Such was the dire nature of the public finances that the government looked at reducing the number of teachers and students in the schools system.

The first proposal, to reduce student numbers involved raising the school entry age from four to five at a saving of £26m.

A second proposal was to restrict the second-level cycle to five years in all schools, saving £30m.

It was noted that reducing second-level to five years would result in pupils leaving school too young; raising the entry age would avoid this consequence.

21. No economic boom, no baby boom, no Rotunda extension

A proposal to extend the Rotunda was refused

In February 1987, the Department of Health advanced plans for a new £4.25m five-storey extension to the Rotunda maternity hospital in Dublin.

The extension included two 24-bed units, a new delivery suite and a new operating suite.

A letter from the department, to the Minister for Finance noted that the development was "essential to provide accommodation of an acceptable standard for the delivery of a modern obstetric service."

It would replace "existing sub-standard and antiquated facilities".

The proposal was refused by July, partly because of limited financial resources. The other reason was that the number of births in the Eastern Health Board region had fallen steadily between 1980 and 1985.

22. Proposal to withdraw Irish troops from Lebanon

Minister for Finance John Bruton advocated the withdrawal of Irish troops from Lebanon in January 1987 for financial reasons.

Following the Israeli invasion of Lebanon in 1978, the United Nations Interim Force in Lebanon (UNIFIL) was established.

From then the Defence Forces had an Infantry Battalion of approximately 540 personnel in Lebanon, which rotated every six months.

A signpost in Camp Shamrock, South Lebanon (RTÉ Stills Library)
The finance minister said there was a strong case for withdrawing Irish troops from Lebanon

Documents released today show how the then finance minister argued that on financial grounds there was "a strong case for withdrawing the Irish contingent from UNIFIL."

He noted that "Irish participation in UNIFIL constitutes a cost to the Exchequer, as the normal home pay and allowances of the permanent Defence Forces must be taken into account.

The recoupment rate of $600 per man per month was no longer adequate to recoup the extra costs of the overseas allowances paid to the Defence Forces personnel on UNIFIL duty."

A memo prepared by the Department of Finance on 19 January 1987 concluded: "For financial reasons, therefore, the Minister for Finance would favour Irish withdrawal from UNIFIL or, at least, a significant reduction in the strength of the Irish contingent at the next rotation of troops in mid-April 1987."

There were mixed views during a Cabinet discussion about Irish participation in UNIFIL on the same date.

The death of Corporal Dermot McLoughlin nine days earlier had deepened concerns around the security of our UNIFIL personal.

A government memo details that Corporal McLoughlin was killed when a round fired by an Israeli tank struck his post.

All of the circumstances pointed to "the incident being a deliberate and unprovoked attack."

Minister for Defence Paddy O’Toole was "gravely concerned about the safety of Irish troops" in the area.

Minister for Foreign Affairs Peter Barry said that a decision to withdraw "would do a disservice to our international reputation."

He pledged to maintain contact with the Israeli authorities to ensure maximum restraint and to press the US to use its influence over Israel.

23. Minister considers RTÉ cuts

The finance minister considered reducing RTÉ's capital expenditure (RTÉ Stills Library)

Officials at the Department of Finance in 1987 warned the then Minister Ray MacSharry that cutting RTÉ’s funding would damage the quality of programming.

The minister was considering reducing RTÉ’s capital expenditure to the bone but a briefing paper prepared ahead of that year’s Budget advised against this.

"Failure to invest adequately would result in RTÉ slipping behind other stations in the quality of its output and would limit its ability to turn out home-produced programmes," it stated.

The two-page document also says that severe cuts to the station’s capital allocation would hamper RTÉ’s ability to generate revenue.

It described "financial successes" at RTÉ in the previous two years leading up to 1987 and suggested this should not be jeopardised.

It said this was an important point because "RTÉ’s financial performance for most of its existence has been quite poor."

24. General Election forces cancellation of Egyptian Pharaohs exhibition

The day before Charles Haughey was elected Taoiseach on 10 March 1987, the outgoing Minister of State for Arts and Culture Ted Nealon penned a letter to Egypt.

Ted Nealon told the Egyptian minister Ireland was unable to proceed with the exhibition (RTÉ Stills Library)

The minister’s letter, addressed to Dr Ahmad Haikal, the Minister for Culture in Cairo, expressed "personal regret that we were unable to proceed with arrangements to bring the exhibition 'Women at the Time of the Pharaohs' to Ireland.

The exhibition had been touring cities across Europe but the Dublin leg of the tour was cancelled due to "the intervention of a general election, and as a result, a new government and parliament making it impossible for us to enter into the commitments involved in time".

Due to the election on 17 February, plans for hosting the exhibition in Dublin were sidelined.

Minister Nealon’s letter admitted: "We failed to get a quotation from the German insurers to cover the exhibition during its stay in Ireland. And, also we would have had to incur additional costs on storage and security."

As the costs of hosting the exhibition would have been "considerably higher than those experienced by others. It was evident that were we likely to incur a severe loss on the exhibition and the decision to enter into a formal commitment could only be made by the incoming government and parliament."

The letter concluded that Ireland hoped to host an Egyptian antiquities exhibition at some future date.

25. British plan to exclude Sinn Féin from Northern Ireland elections

The British government was planning to introduce a requirement on prospective local election candidates in Northern Ireland to make a declaration not to participate in, or support proscribed organisations.

The move was being considered against a backdrop of Sinn Féin winning and taking up 59 council seats in the 1985 local elections, to the discomfort of unionists obliged to share the council chambers with them.

In a briefing note from the Anglo Irish Secretariat in Belfast from September 1987, officials said the Taoiseach had already responded negatively via diplomatic channels, warning the British that such a proposal would "hand Sinn Féin a propaganda bonus and would be counter-productive".

However, Secretary of State Tom King seemed keen to push on with the idea, and told the Irish government they were considering a consultative paper.

Northern Ireland Secretary of State Tom King

Officials in the Anglo-Irish Section said they had made it clear to their counterparts that "Sinn Féin were likely and to seek, and find, a way around such a declaration".

They also warned them the move "would bring into focus again the non-prohibited status of the UDA".

26. British Ambassador’s travel plans leaked to "Provisionals"

A security scare was sparked after secret details of a trip by the British Ambassador Nicholas Fenn to Kerry in August 1987 were leaked.

Details of Nicholas Fenn's trip to Kerry were leaked (RTÉ Stills Library)

The Taoiseach briefed the Cabinet on the matter that was officially described as the "unauthorised disclosure of a Garda document."

However, a more informal message drawn up by the Taoiseach’s Assistant Secretary is altogether more revealing.

It talks of the "leakage to the Provisionals of a secret internal security paper of the boys in blue (Gardaí) related to the security of Mr Nicholas Fenn when he was on a visit to a house in Kerry for three days."

It notes that "the leakage led to a Provisional protest picket on the house;" however "the boys in blue had become aware of the leak in the meantime and considerably stepped up their measures, so no danger arose."

As to the source of the leak, the note is somewhat cryptic as it tells the Taoiseach, "the belief is it may have happened in a neighbouring location you are shortly to visit."

27. Irish language street signs

A report from a senior official in the Anglo Irish Secretariat in Belfast said that civil servants in the Northern Ireland Office told them that Secretary of State Tom King "could not make up his mind" on proposals for the use of the Irish language.

Officials at the NIO had produced an ordnance survey map of Northern Ireland place names in Irish, but Mr King had queried why the publication could not have been undertaken by private enterprise.

Mr King, they said, was ‘"earful of the consequences" of implementing proposals on the Irish language.

The official recorded that the NIO had "come around to the view" that the only solution to the erection of street signs in Irish was to repeal a 1949 act which prohibited the erection of signs in any language other than English.

The observation from the NIO was that trying to "test public opinion in a particular street, or how to force unionist councils to comply and pay for the erection of street signs in Irish, is a much more complicated and legal area."

28. Northern Troubles costs State millions in 1987

The State Papers show that around 20% of the garda budget for 1987 was spent on policing costs arising from the Troubles in Northern Ireland.

The cost to the Defence Forces was even greater with some 40% of its total spending focused on security linked to what was happening in the North.

The overall figure for the amount spent by the State on this security in 1987 was IR£179 million.

However, the RUC believed that while there was a "considerable improvement" by gardaí in seizing weapons and equipment they were less successful in finding those responsible.

That was the view of the RUC Chief Constable at a meeting of the Anglo-Irish Intergovernmental Conference in Belfast in April 1987.

The RUC also wanted an Assistant Garda Commissioner appointed to take change of all security activity along the border with Northern Ireland.

This proposal was rejected by the gardaí because "an area covering a border 300 miles long and spanning four Garda Divisions is too extensive to be administered by one individual."

29. Athlone man claims rights on National Lottery

The launch of the National Lottery was not without its teething problems (RTÉ Stills Library)

The National Lottery’s first gaming operations got under way on 23 March 1987 with the sale of scratch cards.

But the launch was not without its teething problems.

A letter from Chairman of the new National Lottery Gerard Harvey to Minister for Finance John Bruton in January 1987 explains that there was delay in the rollout of the computer software for operating the new system.

He said: "The unfortunate consequence of this setback" was a delay in the launch date of three to four weeks.

The National Lottery later informed the minister that the delayed launch would result in a loss of one month’s sales anticipated at £2.5m.

Documents revealed today also show solicitors for Athlone man David Clelland wrote to the National Lottery in early February 1987, arguing that their client was the registered owner of the names ‘National Lotteries’ and "Irish Lotteries".

He intended to operate a national lottery of his own and a series of legal correspondence between the National Lottery and his solicitors was exchanged.

Among it, is a letter from Des Hickey, solicitor for the National Lottery. He labels Mr Clelland’s bid to hold the National Lottery company accountable for profits it makes as "absurd".

30. Peter Robinson’s fall in loyalist esteem

A confidential Government briefing document on Northern Ireland security in 1987 concluded that the loyalist organisation "Ulster Resistance" was relatively inactive.

The organisation founded in November 1986 was described as "the latest of Ian Paisley’s attempts to mobilise a ‘third force’ (though many regarded Peter Robinson as the driving force behind this one)."

But by March the following year the government here believed the Ulster Resistance was quiescent.

This, it felt, was due in part to the fall in support among loyalists for Peter Robinson after his appearance in the Special Criminal Court in Dublin.

There the then East Belfast MP pleaded guilty to unlawful assembly after a loyalist incursion into Clontibret, Co Monaghan.

However, the State Papers believe the Ulster Resistance was still a force to be reckoned with if loyalists stepped up their campaign against the Anglo-Irish Agreement.