Jonathan Powell appears before On the Runs Westminster inquiry
The Northern Ireland peace process is "still quite fragile", Tony Blair's former chief of staff has told Westminster's On the Runs inquiry.
The government scheme came to light when one of the letters, which were sent more than 200 Irish republicans, caused an IRA bomb trial to collapse.
John Downey was wrongly told he was not wanted by any UK police force.
Jonathan Powell said the victims of the Hyde Park bomb "have every reason to feel aggrieved that the trial failed".
He told the Northern Ireland Affairs Committee that the issue of On the Runs dealt with people who were wanted by the authorities while the administrative letters scheme dealt with people who were not wanted.
"The peace process is still quite fragile; it can be destroyed if people try hard enough to do so - I hope it won't be," he said.
"I think the victims of the Hyde Park bomb have every reason to feel very aggrieved because the trial failed.
"I don't think that applies to the whole administrative scheme, because it was to allow people to come back who weren't wanted - in the case of Downey, he was wanted.
"Logically speaking, this shouldn't impinge on other victims because this is not supposed to be about giving pardons or 'get out of jail free cards'."
Last week, the Northern Ireland Affairs Committee resumed its inquiry after a summer recess with an appearance by Northern Ireland Secretary Theresa Villiers.
Mr Powell was asked about Ms Villiers' remarks that those who received letters should no longer rely on them as a defence.
"I was surprised that was a gesture a politician would make, given that you have to have a relative balance if you are secretary of state for Northern Ireland on these matters," he said.
"She may well have her reasons for doing that which I am simply unaware of."
Mr Powell added: "One of the things I have discovered after leaving government is that people in government know a lot of things that people outside government don't know, and it's sensible to be quite cautious about opining on those things without that knowledge."
He said the On the Runs issue had never been resolved.
He said the letters scheme "evolved" after Sinn Féin came forward with the first names.
"This scheme evolved - when the first names were put to us we had no plan for a scheme, it developed into a scheme," he said.
Mr Powell said many aspects of the peace process were unpalatable to him, but "you can't have a peace agreement that is a la carte".
In July, a separate review into the scheme by Lady Justice Hallett found that it was flawed, but not an amnesty for those who received letters.
Mr Powell said he agreed with all of Lady Hallett's findings.