Last February, the High Court ruled the parts of the act related to the ICOs were incompatible with the European Convention on Human Rights.
The government has now tabled a remedial order in Parliament that will repeal various parts of the Legacy Act, including the sections covering ICOs.
The Policy Exchange paper criticising the move has been backed by 16 peers, including Shadow Attorney General Lord Wolfson KC.
He said: “The government’s decision to repeal sections 46 and 47 of the Northern Troubles Act 2023 is inexplicable and unexplained.
“Parliament must now ask hard questions about why the government is determined to override Parliament’s recent, unanimous decision to vindicate the Carltona principle and to block Gerry Adams from being paid public money.”