An inquiry into the murder of solicitor Patrick Finucane has been told that the extent to which his killers were encouraged, assisted, protected or directed by the British State is the most serious question in a society governed by the rule of law.

The lawyer was shot dead by loyalists in front of his wife and children in his north Belfast home in February 1989.

The second day of hearings in the inquiry in Belfast, which formally opened in June, heard an overview of information about the highly controversial killing that is in the public domain.

Barrister Matthew Hill, legal counsel to the inquiry, recalled how the report of a previous inquiry resulted in former British Prime Minister David Cameron stating that it showed “frankly shocking levels of collusion”.

He outlined the known involvement of British Army and RUC Special Branch agents in the murder, and a reference in a report by lawyer Sir Desmond de Silva in 2012 to evidence that suspected paramilitaries arrested in connection to the killing were congratulated by RUC officers.

Geraldine Finucane, the murdered solicitor’s wife who was injured in the attack, sat in the public gallery with other family members as the barrister rehearsed what is known and said there were many competing theories and opinions about the murder.

He described Patrick Finucane as “a groundbreaking lawyer” and said his work was what led others to kill him.

The lawyer said there was no evidence that the solicitor was a member of the IRA but said his killers may have wrongfully believed that he was because of information they had been given by the security forces.

“To what extent were his killers encouraged, assisted, protected or directed by the State?”, he said.

“There is no more serious question in a democratic society governed by the rule of law.”

The inquiry will consider the relationships between the killers and the RUC, British Army and British security service MI5.

In terms of the RUC, Mr Hill said it will examine claims that RUC officers had suggested to members of the UDA that Patrick Finucane should be shot.

“The alleged direct culpability of an RUC officer, or RUC officers, in the decision to murder Patrick Finucane, is a matter that this inquiry will examine and examine thoroughly,” he said.

It will also examine the role of British Army agent Brian Nelson, who is known to have been involved in targeting Mr Finucane, and the extent to which MI5 oversaw the work of the military unit that ran him.

Mr Hill said the inquiry must also consider a possible “stark explanation” that the interactions between the security forces and the UDA were the consequence of “a deliberate and directed action to use the UDA as a proxy to murder a lawyer who had incurred the enmity of the State.”

The inquiry continues.