BBC Ireland Correspondent Denis Murray: This decision has been widely condemned

Scots Guardsmen Mark Fisher and James Wright were released on licence in September after serving three years for the murder of Peter McBride in Belfast.

Mark Fisher: Freed on licence

Northern Ireland Secretary Mo Mowlam said at the time she did not think they should remain in the the Army.

But the Army Board decided on Tuesday the two men's service careers could continue.

Northern Ireland Correspondent Denis Murray recalls the McBride shooting

A statement from the Ministry of Defence said: "The board reached the conclusion, allowed for in Queen's Regulations, that there were exceptional reasons for the retention of the two guardsmen."

Wright and Fisher shot Mr McBride twice in the back while on patrol in a nationalist area of north Belfast.

Peter McBride: Shot in the back

They told the court they thought the 18-year-old was carrying a bomb but were convicted of murder and jailed for life.

Their case was brought up time and again in both Houses of Parliament and by several newspapers.

Earlier this year former Tory cabinet minister Lord Tebbit tried to amend the Northern Ireland Sentences Bill to require the early release of the two Guardsmen before any paramilitary prisoners were released.

James Wright: Thought Peter McBride was a bomber

Lord Tebbit was joined in his desire to see the two Guardsmen released by the former Labour Northern Ireland Secretary, Lord Merlyn-Rees.

Colonel Tim Spicer, the men's commanding officer at the time, said: "I am delighted with the Army Board's decision to allow James Fisher and Mark Wright to continue their Army careers.

"It was absolutely disgraceful that they were convicted in the first place."

Independent MP Martin Bell, who last December became patron of the group campaigning for the guardsmen's release, said: "I always thought it was inconceivable that the Army Board should stand by these two during the years of their detention and then abandon them when there were free men."

Ulster Unionist Party security spokesman Ken Maginnis was "absolutely delighted" that the soldiers were to remain in the army.

But Sinn Fein attacked the Army Board decision as "a blatant disregard for the life of Peter McBride".

Speaking for the party, Belfast Councillor Mick Conlon said it legitimised what was in effect "a random and brutal killing".

Earlier this year another British soldier, Private Lee Clegg, had his conviction for the murder of another Catholic teenager in Belfast quashed.