Mr Lynch accepted a position as a director of Irish Distillers, one of the Republic's largest public companies shortly after resigning as head of government.
It indicated the pattern of withdrawal from politics that his career now took. Shortly afterwards he joined the Irish board of Algemene, a Dutch bank, and the boards of Hibernian Insurance and the Smurfit Group. Later he accepted the chairmanship of Galway Crystal.
Mr Lynch continued to defend the record of his Government, especially on the north and the economy. But by May he let it be known he would not be contesting the next election and he had already reiterated many times that he was not interested in being nominated for President - a post he would almost certainly have won without a contest. One of his last interventions within Fianna Fail was to raise the issue of Miss de Valera's dual mandate as a TD and Euro-MP, which was against party policy.
In May, Mr Lynch was invited to the People's Republic of China. He had initiated the opening of full diplomatic relations with that country. On his return there was renewed speculation on the Arms Crisis following the publication of the diaries of the former Secretary at the Department of Justice, Mr Peter Barry, in Magill magazine.
These asserted that Mr Lynch was aware of the activities of Mr Haughey and others charged with gun-running activities earlier than the time of the Haughey dismissal. Mr Lynch denied this but, in his efforts to set the record straight from his own perspective, was accused of joining the campaign to isolate the new Fianna Fail leader by another old adversary, Mr Kevin Boland.
Mr Lynch was again drawn into the internecine warfare of the party two months later when he was guest of honour at a function in Kilkenny, organised by his former Agriculture Minister, Mr Jim Gibbons, who had been banished to the back benches under the new regime. At it, Mr Lynch criticised those who denigrated democracy in favour of benevolent dictatorship.
Inevitably, many took this as a veiled attack on the highly personalised nature of Mr Haughey's administration, although Mr Lynch was careful not to refer at all to the internal problems of the party. He also continued to defend the Fianna Fail Government in its efforts to tackle the economic crisis.
In December, he spoke again at the Cambridge Union debate and urged a new constitutional initiative by the British to "take the raison d'etre of violence out of the hands of the men of violence and restore to the legitimately elected representatives of the people a realistic forum in which to work and to which the people can look for a way forward."
Speaking in favour of a motion "That the declared aim of British policy should be Irish unity," he declared that no people could "voluntarily abandon part of their territory against the wishes of the majority" and the Irish people would never weaken their resolution on this point. He assured his audience that the majority in Ireland had no wish to dominate, only seek an accommodation "with our Northern friends." The motion was lost by 276 to 152 votes.
At the end of the month, Mr Lynch and Bishop Lucey were conferred with the freedom of Cork. More than 2,000 people packed into the City Hall, where the presentations were made by the city's Labour Lord Mayor, Mr Toddy O'Sullivan. In the following year he was awarded the Gold Medal of European Merit by Luxembourg, which was frequently awarded to retired European statesmen. In January, Mr Lynch became involved in the anti-apartheid issue, when he urged the Irish Rugby Football Union to abandon its proposed South African tour. It was his last political intervention before the general election in June, 1981, when he was not a candidate.
He continued to advocate his own moderate line on the North through various invitations to public functions in Ireland and North America and through his extraordinarily wide circle of friends and associates in Irish, American and British politics and big business.
He broke with party tradition in September, 1983, in agreeing to speak at a Friends of Michael Collins seminar in Mayo. The organisation was essentially Fine Gael in outlook and associations and drew the now predictable criticism from local Fianna Failers.
Among his last public comments were two which indicated how far he had travelled politically from the party he had once led and its new leadership. In early 1985 he deeply regretted the expulsion of Mr O'Malley from the Fianna Fail parliamentary party over his remarks on the New Ireland Forum and at the end of the year he warmly welcomed the Anglo-Irish Agreement, condemned by Mr Haughey. During the course of the year he also questioned Irish attitudes to neutrality in the context of defending the EEC.
In 1987, Mr Lynch spoke out in support of Ireland ratifying the Single European Act, saying it was not a threat to neutrality.
Following the Supreme Court judgment in the McGimpsey case that there was a "constitutional imperative" on Irish governments, because of Articles Two and Tree, to strive for national unification. Mr Lynch told an Irish Association seminar in 19990 that the time had come to give serious consideration to amending the articles "so as to re-assure unionists that the Constitution does not pose a threat to them."