Thirteen people were killed and 14 wounded on Jan. 30, 1972, in Londonderry when the soldiers opened fire on a Catholic crowd demonstrating against Britain's detention without trial of Irish Republican Army suspects. Britain compounded local fury by hastily ruling that the soldiers, none of whom were wounded, were responding to IRA attacks and targeting gunmen.
Last year, Prime Minister David Cameron apologized after a 12-year investigation found that the soldiers were not under attack and fired without justification on unarmed civilians, many of whom were fleeing or aiding wounded.
Britain's Defense Ministry confirmed Thursday it has written to lawyers representing the Londonderry victims' families seeking terms for financial payments. It offered no details of potential payouts.
"We acknowledge the pain felt by these families for nearly 40 years, and that members of the armed forces acted wrongly. For that, the government is deeply sorry," the ministry said in a statement.
Peter Madden, a Belfast lawyer who represents many of the victims' families, said negotiations would open soon with the British government to put a price both on the lives lost and maimed and on the damage caused to victims' reputations by the British Army's "shameful allegations" that they were armed IRA members.
But some families immediately rejected any offer of financial compensation, stressing they want criminal prosecutions of those who opened fire. Nobody has ever been charged over the 13 killings.
"It is repulsive. Offensive. Not now, nor at any time will I accept money," said Linda Nash, whose 19-year-old brother William was shot fatally through the chest. "I've already told my legal team I want to go forward with prosecutions."
Nash noted that Britain in the early 1970s had offered her mother a cursory compensation payment of 250 pounds, about $625 at the time. "She didn't take it then and I will be doing the same," she said.
Madden said most families involved received "derisory and wholly inappropriate" payments from Britain in 1974, but that would have no bearing on the upcoming negotiations.
The Bloody Sunday Inquiry, authorized by former Prime Minister Tony Blair in the immediate build-up to the Good Friday peace accord of 1998, was empowered to find the truth behind the British Army's worst act of violence in Northern Ireland. Families of the dead had demanded such a probe for decades.
The investigation led by English judge Lord Saville produced a 5,000-page report based on evidence from 921 witnesses, 2,500 written statements and 60 volumes of written evidence. It cost nearly 200 million pounds ($300 million).
Saville gave the ex-paratroopers, now in their 60s and 70s, broad protections from criminal charges as well as anonymity in the witness box, citing the risk that IRA dissidents might target them in retaliation.
However legal experts say wiggle room remains for prosecutions and, more likely, civil lawsuits against the retired soldiers, particularly those who were found to have lied during their testimony.
Associated Press writer David Stringer in London contributed to this report.