The Old Bailey bomber Marian Price was yesterday granted bail at Derry Magistrate’s Court accused of an offence under the Terrorism Act.

However, Price - who was named in court as Marian McGlinchey - was not released from custody because her life licence was revoked by the Secretary of State Owen Paterson.

In a statement Mr Paterson said he made the decision because the threat posed by Price had “significantly increased.”

Price, of Stockman’s Avenue, Belfast, received a life sentence for the bombing of the Old Bailey in London in 1973, however she was later released on licence under the Good Friday Agreement.

The 57-year-old appeared at Derry Magistrate’s Court yesterday charged with addressing a meeting that encouraged support for a proscribed organisation on April 25.

The court heard that the charge relates to an annual Easter Monday commemoration at the city cemetery in Derry, where Price is accused of encouraging support for the IRA.

There was a high police presence inside and outside the courthouse as the 57-year-old appeared and around fifty protesters had gathered outside holding placards demanding her release.

An investigating officer told the court Price was at the commemoration and held a statement for a masked man who claimed to be representing the IRA.

The officer said there were “threats against anyone from the nationalist or Republican community who were perceived to be traitors” contained in this statement, as well as the threat of a continuing military campaign.

The court heard that during police interview Price made no comment, however she handed in a prepared written statement.

She admitted being at the commemoration, but claimed she had no knowledge there would be a masked man there and that she did not know what was in his statement until it was read out.

Opposing bail, the officer said police feared Price would leave the jurisdiction or commit further offences. He revealed the defendant is currently on bail for public order offences allegedly committed during a Republican protest in July 2010.

Defence solicitor Peter Corrigan told the court they planned to challenge the revocation of the 57-year-old’s life licence, which he claimed was “unlawful.”

He added the decision of the Secretary of State “drives a coach and horses through the presumption of innocence.”

Mr Corrigan said the charge faced by his client is at the “bottom of the scale of offences under the Terrorism Act.”

District Judge Barney McElholm granted bail and told the court he believed police fears could have been addressed with appropriate bail conditions.

These include two sureties of £10,000 and banning the 57-year-old from attending, organising or participating in any meeting which may be attended by a member of a proscribed organisation.

However, because of the licence issue Price was remanded in custody and will appear in court again via videolink on June 9.