Bloody Sunday: 'We don't care about cost. We want justice'

On a shelf in a glass case, in a room in the Bogside area of Derry, there is a yellowing cotton Babygro covered in brown blotches. The stains were made by the blood of Michael Kelly, a 17-year-old boy who was shot dead in the street just outside.

"We carried him into a house," recalls his brother John, still angry and grieving 36 years later. "The woman there grabbed anything she could to try and stop the flow of blood."

She pressed the Baby-gro against a bleeding wound caused by a bullet from a gun fired by a member of the British Army. It was 30 January 1972, a day that would become notorious as Bloody Sunday. Michael Kelly and a dozen others died when soldiers from the Parachute Regiment opened fire on a civil rights march. "They were supposed to uphold law and order and protect us," says his brother, "but they turned their guns on us."

The Bloody Sunday inquiry into exactly what happened that day will soon have been going for 10 years. It is the second inquiry, the first having been a rush job that outraged many and satisfied none. Lord Saville of Newdigate has overseen the longest-running and most expensive investigation of its kind in British legal history, at a cost – so far – of more than £174m.

When Tony Blair, the new Prime Minister, announced the inquiry on 29 January 1998, he hoped it would give the relatives of those who died "closure". But what does that mean? What would satisfy them? And when is it coming?

Soon, according to Lord Saville, who recently told the families to expect a "voluminous" report only "a matter of months" into 2008. That may now be May or June, as this paper has learned that a fresh statement was taken from a witness just last month. It has led to fears that Lord Saville might not be about to give the relatives what they want: an official declaration that every one of the 14 people killed by the Paras was an innocent victim.

"They were not gunmen or bombers," insists John Kelly. Tony Blair and his predecessor, John Major, have already agreed that Lord Widgery – who led the first inquiry – was wrong to suggest that some of the victims may have been armed. They "should be regarded as innocent of any allegation that they were shot while handling firearms or explosives", Mr Blair said a decade ago. But that was far too ambiguous and not nearly official enough for Mr Kelly and the other relatives.

Crucially, they are waiting to hear what Lord Saville says about Gerard Donaghy. This 17-year-old member of Fianna Eireann, a Republican youth movement linked to the IRA, was the only casualty with such an affiliation. The inquiry saw police photographs of the body at a medical centre that showed nail bombs sticking out of his pockets – but it also heard from the soldier who took him to the centre and saw no bombs at all.

"The bombs were planted," insists Mr Kelly. At best, Lord Saville will say that is probably true. He and two fellow lords have heard from 900 witnesses and read thousands of statements, the most recent being directly about Donaghy, but they are still mostly dealing in probabilities. So at worst (for Mr Kelly), the report will say the boy was probably carrying bombs.

The close-knit band of relatives and campaigners will see that as a betrayal of the truth – and no doubt some will change their minds about it having been a huge waste of money. By the end of the legal proceedings in 2005 the fees stood at £92m. Individual lawyers made fortunes: Sir Christopher Clarke earned £4.5m acting for the inquiry; Edwin Glasgow QC, representing the military, got £4m. Another 30 barristers or QCs made more than half a million each.

Hotels, bars and restaurants in Derry (as the city council calls the place also known as Londonderry) did well out of the hearings before they moved to London, but Sir Hugh Orde, head of the Police Service of Northern Ireland, still called the inquiry "a huge money-sucking venture". Unionists opposed it from the start. Supporters of the Army called it "a shameful pillory". The Conservatives called the bill "scandalous".

They have an unlikely ally in Eamonn McCann, the writer and political activist who helped to organise the original march and now chairs the Bloody Sunday Trust. "The cost is outrageous," he agrees. "There was a feeding frenzy by lawyers. Some were getting £2,000 a day, some more than that. It is indefensible that a crime perpetrated against working-class people should have the consequence of making millionaires out of people who were already quite well off."

Yet Mr McCann insists Lord Saville was right to take his time: "It is perfectly possible to be outraged by the cost of the tribunal but still want the truth about what happened on Bloody Sunday to be pursued with all vigour. That's my position."

If so, why not hold similar inquiries into attacks such as the Omagh bombing, for example? Mr McCann, who lives in the Bogside, believes Bloody Sunday is different. "All the other atrocities can be put down to the clash between communities. This was the state murdering its citizens in broad daylight.

"It wasn't a bomb on a lonely road, or something planted in the night: it was in a built-up area on a bright winter's afternoon, where there were thousands of people." There were about 15,000 on the march. "Every single killing was witnessed by many people – some at close range. I saw people die – and so did someone from every family in this street. That's why the tribunal has taken so long: there are so many witnesses."

The respected former Northern Ireland Ombudsman Dr Maurice Hayes said in Derry last year: "I do not believe that the Saville inquiry will unearth the essential truth, the definitive account of the events on Bloody Sunday, which are so deeply incised on the psyche of this city. I can think of many better things to do for the families of victims and survivors for £200m."

But Mr Kelly, a quietly spoken man who often teaches schoolchildren about Bloody Sunday, just laughs at the suggestion that the city could have been transformed. "Derry wouldn't have got the money would it? It would have gone somewhere else. They've wasted far more in Iraq." What about giving each of the families a million or two in compensation – wouldn't that have been quicker and cheaper? "I would look upon it as blood money," he says, shaking his head. "This is not about money."

The costs have been "astronomical", he agrees, "but I don't care. I never did care how much it was going to cost. You cannot put a price on a human life, or on the search for justice." What would justice be? "I want to see the man who killed my brother go to prison."

Lord Saville cannot make that happen. He can only lay out in detail what happened that day – much as the Museum of Free Derry has done, to its own interpretation, on the Bogside where Mr Kelly works. It was opened last year by the former Guantánamo Bay internee Moazzem Begg, part-financed by a law firm that profited from the inquiry.

A real-time audio recording of the day sends shrieks and screams through the room. In one glass case lies a crumpled brown corduroy jacket marked with two yellow labels put on it during the inquiry to show where bullets entered the back of James Wray, 22. Close by is that Babygro. "My mother asked for all Michael's things to go in the coffin with her when she died," says Mr Kelly. "Some things got away. I have a Mars bar at home that is 36 years old. It was his. And there's this. That's his blood."

Michael had been in a coma as a child, and his mother was very protective. She had to be persuaded to let him march, protesting at the internment of prisoners without trial. "She followed the march to keep an eye on him," says Mr Kelly. "Then she lost sight of him."

Many marchers turned away when confronted by the Paras but some stayed to hurl stones and insults. The soldiers used CS gas, then began to advance towards Free Derry, the nationalist area just below the historic city walls that had declared itself a no-go area for the authorities. Shots were heard.

Did the Paras fire first or respond to an IRA gunman? Lord Saville is expected to provide an answer. Either way, 13 people were killed that day and another died later from his wounds. Seven were teenagers. "The sound of the bullets whizzing past is still in my head," says Mr Kelly, who ran through the streets to find his brother. Michael was declared dead on arrival at the hospital.

"I remember my father sliding down the wall when we told him. My mother went into total hysterics." She went to pieces. "For years she didn't even know who she was herself. We found her going to the cemetery on one snowy day with a blanket to keep him warm."

Many relatives say they will stop campaigning after Saville, whatever he says. But can anything in the report make John Kelly do that? "No. I want Soldier F prosecuted for the murder of my brother." The blurry image of the soldier, identity withheld at the inquiry, appears on a poster at the museum. "The bullet retrieved from Michael's body was traced back to his rifle. He's a multi-killer who took the lives of four people that day."

He hopes the report will lead to criminal charges. "I had black hair, now it's white. I want to move on with my life. Once F is prosecuted, then I can get closure."

And if not? If the report is all that the families hope for, but still does not lead to anyone being charged, what then? Mr Kelly smiles at the absurdity of what he is about to say, because he knows that in the 10 long and costly years of the Bloody Sunday inquiry there has only ever been – and only ever will be – one set of real winners. "We'll have to discuss that with our lawyers."

Lawyers' payday: Where the money went

Legal fees £92.7 m

Accommodation £15.4m

Transport £4m

IT equipment £13.1m

Hire of halls £7.7m

Other* £41.3m

(*includes salaries of tribunal members and staff, expert witnesses, office services and security)

Who made the most:

Counsel for the inquiry

Sir Christopher Clarke £4.4m

Alan Roxburgh £2m

Cathryn McGahey £1.6m

Bilal Rawat £1.4m

Solicitors for the inquiry:

Eversheds £12.6m

Counsel for the families:

Arthur Harvey £1.2m

Solicitors for the families:

Madden & Finucane £9.2m

Desmond Doherty &Co £1.2m

MacDermott & McGurk £1.2m

McCartney & Casey £1.2m

Counsel for the armed forces:

Edwin Glasgow £4m

David Lloyd Jones £1m

Gerard Elias £1.7m

Sir Allan Green £1.5m

David Bradly £1.2m

Nicholas Griffin £1.1m

Solicitors for the armed forces:

Payne Hicks Beach £3.7m

Devonshires £2.7m

Kingsley Napley £1.9m

Treasury Solicitor £3m

Only payments of more than £1m are shown. In addition 21 counsel representing the families or the armed forces were each paid £500,000 or more.