Pat Finucane has been labelled a "godfather" from an "IRA family" by former Ulster Unionist MP Lord Maginnis of Drumglass.
Prime Minister David Cameron said he was "deeply sorry" for the extent of state involvement in the death of the Catholic father-of-three.
But in the House of Lords, Lord Maginnis said: "As someone who has been fortunate to survive 10 attempts to murder me by the Provisional IRA, I find this isolated apology quite ridiculous. The reality is that the Finucane family were an IRA family and I can illustrate that by saying that, when I gave that allegation publicly and was being sued for libel, the family retracted and paid my legal expenses. So let's not fool ourselves about the godfather Finucane, who was killed.
"If there was connivance then let me say we talk, all of us who served through the heart of the Troubles of Northern Ireland, we served in a way where it was impossible to have secrets. Why were there 10 attempts on my life? Why was Lord Kilclooney shot? Because there was conspiracy. Less than 1% of all terrorist suspects involved in proactive security force operations were killed by the security forces, 99% ended in arrest."
He added: "Let's not forget all those years of terrorism and become compelled by a single incident which may, in fact, and I won't deny this, have had conspiracy."
Lord Maginnis said he did not justify the action "but if one sought justification, godfathers were responsible for so many murders in Northern Ireland it should not be forgotten".
Baroness O'Loan, the first police ombudsman in Northern Ireland, said the report was "profoundly disturbing". She said: "Mr Finucane was not involved in IRA activity, he was a lawyer carrying out his professional duties in profoundly difficult and dangerous circumstances."
Tory Lord King of Bridgwater, who was Northern Ireland secretary when Mr Finucane was murdered, said he took exception to the use of the phrase "state involvement" in connection with the death. He said: "It does give the impression that somehow the government was planning the murder of Patrick Finucane - and the appalling concept that I, as secretary of state, might have authorised it which is, of course, totally untrue. I have committed myself in my time to trying to save every life I could on either side of the community, however they were involved."
But he added: "This was an appalling crime of which we should all be ashamed. It should not have happened. It is particularly appalling because there was quite clearly evidence of significant collusion."