A Downing Street spokesman insisted the Northern Ireland (Sentences) Bill meets the Prime Minister's pledges linking prisoner release with decommissioning terrorist weapons.
"The bottom line is that no prisoner will be released unless the organisation they are related to have given up violence for good," the spokesman said.
Although the Bill does not detail the terms of the surrender of weapons, clause three gives the Secretary of State, Mo Mowlam, the power to bar prisoners from release if she believes their organisations have refused to give up violence.
The Northern Ireland Office denied that it would pave the way to legalise the IRA. Ending proscription of the IRA would require the repeal of sections of the Northern Ireland Emergency Provisions Act and the Home Office Prevention of Terrorism Act, which is not planned.
Up to 400 jailed paramilitaries could benefit under proposed legislation published as part of the Good Friday agreement. Ms Mowlam said: "There will be no general amnesty. The gates of the Maze prison will not suddenly be thrown open."
An independent body is to be set up to review each case, prisoner by prisoner, but only those belonging to organisations who declared unequivocal ceasefires will be considered for release on licence.
Sinn Fein's Gerry Kelly said: "According to this legislation there will be a substantial number of releases by the end of the summer and we intend to hold the British government to that."
Mr Adams said: "Clearly in the Good Friday agreement the bottom line is that all of the prisoners need to be out within two years. I see that as the key part in this legislation."
Despite welcoming the Bill, Mr Trimble said his party would be tabling amendments "to try to make it watertight".Reuse content