Marian Price's mental state has left her unfit to face trial following an assessment by prison doctors, it has been claimed.
The Old Bailey bomber who is being held at Hydebank, south Belfast after her release licence was revoked almost a year ago also needs outside care, Northern Ireland Justice Minister David Ford has been told.
Jennifer McCann, a Sinn Fein member of the justice committee at Stormont who met the minister in Belfast, has demanded she be freed.
She said: "The doctors have also stated that she is not fit to participate in any legal proceedings. The fact that she has twice been released on bail by senior judges, who have seen evidence not available to her solicitors, raises the question, how is she a threat to anyone?
"This is an abuse of natural justice. On humanitarian terms alone she should be moved to an outside hospital, never mind the fact that her continued imprisonment damages public confidence in the justice system."
Price, from Stockman's Ave, Belfast, who served time for her part in the IRA bombing of the Old Bailey in London in 1973, was re-arrested by police last May following an Easter Commemoration rally by dissident republicans at Derry's city cemetery where she held paper to enable a masked man to read a speech.
She was later accused of encouraging support for an illegal organisation and granted bail. But Secretary of State Owen Patterson moved immediately to revoke her release licence.
Price has since been charged in connection with the murders of two soldiers in March 2009 - a charge which she also denies.
A spokesperson for the Northern Ireland Prison Service said Price's health was the responsibility of the Southern Eastern Trust. He added: "Her medical needs are being met in full by the SET who have responsibility for the healthcare of all prisoners."