Downing Street dismissed as "utter rubbish, without foundation" claims that the release on licence approved by Sir Patrick Mayhew, the Secretary of state for Northern Ireland, was timed to boost John Major's standing with Tory backbench MPs in today's leadership election.
Dick Spring, the Irish Foreign Minister, noted that Irish concerns about giving the wrong signals by taking the Clegg case in isolation had been raised again with London as recently as four days ago at the Anglo-Irish conference. Yet no signal was given then to Dublin that the release was imminent, Irish sources insisted.
Fears that nationalists will now see the British handling of the peace process as distinctly one-sided were considered by the Irish cabinet yesterday. Publicly, coalition sources were defining their mood as concern rather than dismay. But the terms of Mr Bruton's response left little doubt that he was seething.
Yesterday, he first sent sympathy to the family of Clegg's victim, Karen Reilly, then reiterated his call for equality before the law and in executive action. His blunt assertion that he "now expects the British authorities to apply the same approach to all other similar cases, both loyalist and republican" is effectively a challenge, aimed at eliciting British movement on the wider prisoners' issue.
Sinn Fein reacted angrily to the soldier's release. Martin McGuinness, a senior Sinn Fein official, warned that Clegg's release could threaten the Northern Ireland peace process.
"People here find this decision deeply insulting. I think there can be no doubt whatsoever that it will have very serious implications for the peace process," he said. "The work of all those people who have worked so hard to make the possibility of peace a reality will now be undermined."
Malcolm Rifkind, Secretary of State for Defence, said the criticism was "entirely unjustified. The origins of the review of Lee Clegg's case go back to the statement by the judges in various appeal courts. They made it clear they thought the circumstances were exceptional."
Mr Rifkind told the Today radio programme that all life sentence prisoners were subject to "very meticulous consideration" as to whether they should be released on licence.
The resignation of a member of the review board which recommended Clegg's release on licence was embarrassing for the Government, but ministers were determined to ride out the storm. Dismissing claims that it was linked to the leadership contest, the Prime Minister's campaign team said those agitating for Clegg's release, led by Julian Brazier, the Tory MP, were in the Redwood camp.
Andrew Hunter, chairman of the Tory MPs' Northern Ireland committee, said: "I don't believe any Conservative MP voting in the leadership election will be remotely influenced by Clegg's release on licence. It is totally irrelevant."
Appealing for calm, John Hume, leader of the Social Democratic and Labour Party, said: "He has been released at a very strange time - not only the day before an internal Tory party squabble but at a sensitive time with the July marching season. It shows the insensitivity of people [in London]."
Ministers were insisting that there could be no linkage between Clegg's release and the early release of IRA prisoners. "Each case is taken on its merits. It was a quasi-judicial procedure, and the Dublin government were expecting it," one ministerial source said.
Dublin argues that IRA prisoners could be released on the grounds that - like Clegg - they are no longer at risk of reoffending, because of the ceasefire.
Senior British ministers last night said that there would have to be further evidence that the IRA prisoners, sentenced to life for terrorist offences, would not reoffend again. "It will take more time," said one minister.
London is seeking progress by the IRA on decommissioning, before making any concessions on the release of prisoners, in spite of the street violence. The Prime Minister's office said: "It should not be a threat to the peace process. I don't know how many times we have said that the process of review is quasi-judicial ... It is the same review procedure applied to all life sentence review prisoners."
Lt-Gen Sir Napier Crookenden, chairman of the Clegg Committee, said he was delighted and thankful that Clegg was released and that he had finally got his wish to return to the Parachute Regiment.