The Ulster Unionist leader has demanded a full inquiry into the Claudy atrocity. Mr David Trimble said yesterday it would be an understatement to say he was appalled by the PSNI revelations.
"This barbaric act in Claudy devastated a whole community, and today's development will cause fresh anguish for relatives who only ever sought justice," he said.
He added: "Any cover-up was, of course, a conspiracy to pervert the course of justice and anyone who participated in a cover-up is culpable.
"There must be the same very visible, searching and public examination as that which went into the Bloody Sunday inquiry. Nothing else will do. "
The SDLP leader, Mr Mark Durkan, said the issues raised by Mr Kinkaid's revelations were of profound public interest.
"If what is in the police statement is true, it raises serious issues of concern. If it is not true, other serious issues are raised," he said.
"What is imperative is that families have as much truth about the events as can be established. Anyone with information about what happened or did not happen or about who was or was not involved must bring it forward to help in that process."
He called for "an appropriate form of inquiry" to clear up the Claudy case.
Sinn Féin president, Mr Gerry Adams, said that while he was cautious about the allegations, he would support a call for an inquiry if it came from the victims' relatives.
"I am more than happy to support families that are campaigning for the truth," he said.
The chairman of the Policing Board, which runs the PSNI, said the initial findings of the police review of the case had been passed on to board members.
Prof Desmond Rea said: "The Policing Board has responsibility for ensuring that the police service is effective, efficient and impartial. It is also important that the police has the confidence of the community it serves. With that in mind I welcome the frankness of the PSNI statement."
Police Ombudsman, Ms Nuala O'Loan, yesterday confirmed her office had received a letter in September claiming to have been written by a priest and containing allegations about the atrocity.
She said she did not have the power to investigate state agencies such as the British army, the government or the Catholic church.
But she confirmed that allegations that the RUC did not act on intelligence which may have been available at the time of the bombing would be investigated.