The Minister for Justice, Mr McDowell, has described as "wholly untrue" reports that the kidnapper Dessie O'Hare would be released from prison by Christmas as part of a deal he struck with the Department of Justice.
Mr McDowell said he was the person who made decisions in relation to O'Hare and he had made no such decision.
"I don't make deals of that kind with prisoners and I have to make a decision in relation to him and every other prisoner based on the public good and on objective criteria," he said.
"All the press speculation that I've read today is entirely that - speculation."
Mr McDowell said he took criteria such as the safety of the public and the prisoner's suitability for release into account in such situations. "And I just want to say to the world at large that they shouldn't believe everything that they read in the newspapers. I have made no such decision."
Asked if he was willing to sanction further day-release periods for O'Hare, he said: "All of these matters are considered in advance and I don't talk to prisoners through the media on the subject of their own sentence management policies."
O'Hare was granted overnight temporary release from Castlerea Prison, Roscommon, over the weekend. He left the prison on Sunday morning at 6 a.m. and was returned there at 6 p.m. yesterday. He was escorted to and from the prison by prison officers, but not in an official vehicle.
During his release he attended the Glencree Centre for Reconciliation, Co Wicklow. It was his first temporary release from prison.
The former leader of the INLA is now in his 16th year of a 40-year prison term. He was jailed by the Special Criminal Court in 1988 for the kidnapping and assault of Dublin dentist Dr John O'Grady. The tips of two of Mr O'Grady's fingers were cut off during the kidnapping.
The Irish Prison Service said it worked with all prisoners with their "eventual releases in mind". However, it added O'Hare's overnight release does not mean he is to be fully released in a matter of months as some reports suggested.
"There would be very few, if any, prisoners serving for as long as he is who have not had temporary release of some kind," a spokesman for the prison service said.
"The Parole Board looks at all prisoners after they are seven or eight years into their sentence. But it might be another two years before the parole board even looks at this (O'Hare's) case again."
The chief executive of the Glencree Centre for Reconciliation, Mr Ian White, said O'Hare had "enjoyed his stay".
"He spent most of his time speaking with his wife again, and getting to know his wife again outside the confines of prison." O'Hare's wife stayed with him at the centre over night on Sunday.
Mr White said O'Hare's mood was "very calm, perhaps philosophical". "I would sense from my discussions with him that he has gone through a personal transformation that makes him a very solid supporter of the peace process. The war is over for him, in my opinion."
"We would hope he would come back, we have a former combatants programme here. Members of all the paramilitary organisations including the IRA, UDA, UVF and INLA meet here. I would hope in the future Dessie would become part of that exercise."