The revelation came in secret documents released as part of the State Papers - and showed both senior British army and Royal Ulster Constabulary (RUC) officials felt the British government had "foolishly impaled itself on a hook" with its three specific Washington demands on Sinn Féin/IRA, one of which was prior decommissioning.
In February 1996 the IRA ended its 1994 ceasefire with a lorry bomb in London - just weeks after both senior British security officials voiced concerns over the decommissioning of weapons before the talks process could begin.
The bombing at South Quay, near Canary Wharf, killed two people, injured 40 and caused £150m worth of damage to infrastructure. An IRA warning had been received about the bombing and the ending of its 17-month ceasefire but police had been unable to evacuate the area in time.
The IRA did not renew their ceasefire until July 20, 1997.
Irish government officials had sought decommissioning after or during the talks as part of any final peace settlement.
Department of Foreign Affairs officials noted the position of both RUC acting deputy chief constable Ronnie Flanagan and British army general officer commanding (NI) Roger Wheeler in conversations conducted in late 1995.
Mr Flanagan outlined his view on decommissioning to Irish officials.
"There was never any hope of the paramilitaries agreeing to hand over even a small quantity of arms in advance of political negotiations," he said. "This holds true, in Flanagan's view, for the loyalist paramilitaries as much as the IRA."
Less than three months before the bombing of the London docklands, General Wheeler had a conversation with Foreign Affairs joint secretary David Donoghue.
The meeting took place in Palace Barracks in London and was the subject of a briefing memo sent to Dublin on November 22, 1995.
In it, General Wheeler admitted there was no military need for weapons to be handed over before any direct peace talks.
"Wheeler made it clear that the security forces neither expect nor are they particularly pressing for the handover of any weapons in advance of talks," Mr Donoghue said.
"He is conscious that, in practical terms, the ability of the paramilitaries to manufacture their own weapons and explosives is at least as important as the weaponry actually in their possession.
"Disposing of the latter will not affect the capacity to find new weaponry or to improvise. For as long as a will to use violence survives, the paramilitaries will be able to circumvent any limitations imposed by the depletion or even the removal of their primary armouries. The Washington Three Test, therefore, makes sense only at the level of symbolism."
General Wheeler said the decommission demand came from a political rather than a military judgment.
The memo said Britain viewed prior decommissioning by the IRA as a political act to "build confidence and to get the unionists to the table".