The SDLP's concerns about "on-the-runs" have been raised at a meeting with Irish Prime Minister Bertie Ahern.
SDLP leader Mark Durkan raised his concerns with Mr Ahern
Party leader Mark Durkan said they told Mr Ahern the legislation was "badly flawed" and should be withdrawn.
"They (the British government) are intent on covering up the past with the OTR legislation," he said.
He also said they urged the Irish government to "get back on track" to restore the political institutions in Northern Ireland.
Turning to the new line-up in the Parades Commission, Mr Durkan said: "Clearly the NIO wants this Parades Commission to look Orange-friendly.
"But this will cause serious difficulties. It will encourage those involved in parades to test the commission to its limits in the next marching season. It threatens to store up instability for all of us."
Turning to Restorative Justice Mr Durkan said they were "concerned about the direction of the British government".
"We are worried that the likes of people who covered up the killing of Robert McCartney will be involved in running these schemes. We are worried that local warlords will be acting as if they are law lords.
"We are profoundly concerned about the absence of standards, rights and safeguards in the government's proposals. "
The Northern Ireland Offences Bill, or "on-the-run" legislation, covers up to 150 people wanted for crimes committed before 1998.
They would have their cases heard by a special tribunal, and if found guilty, would be freed on licence without having to go to jail.
The government and Sinn Fein argue that it clears up "an anomaly" left by the release of those already in jail after the 1998 Good Friday Agreement.
The proposed law would set up a two-stage process. First a "certification officer" would decide if someone was eligible for the scheme.
This could be a paramilitary on-the-run, someone living in Northern Ireland who is charged with an offence before 1998 or a member of the security forces accused of an offence committed when they were combating terrorism.
The case would then go to a special tribunal, consisting of a retired judge sitting without a jury. The tribunal would have all the normal powers of the Crown Court but the accused would not have to appear for their trial.
If found guilty they would have a criminal record but would be freed on licence. They would have to provide fingerprints and DNA samples to be granted their licence.
The scheme will be temporary but a precise cut-off period is not specified in the bill - instead its expiry is linked to the lifetime of the chief constable's historic cases review team, which is looking at unsolved murders during the Troubles.