If 13 people were shot dead by British soldiers in your street, you would probably want to know quite a lot about it. But Bloody Sunday was 26 years ago and it was in Northern Ireland, so there does not seem much point in the taxpayer paying for a rather expensive piece of historical research. That, to be blunt, is likely to be the reaction of many people on the mainland of Britain to yesterday's announcement by the Prime Minister. It would be the wrong reaction, because a nation that does not care about its history is not well placed to understand its future.

The Bloody Sunday killings still matter, above all, because they underpin so much of the sense of grievance which sustains republican terrorism. The events of this day in 1972 were critical in changing perceptions of the British Army among nationalists and Roman Catholics in Northern Ireland. The Army, which had been sent to defend them from Unionist extremists, had come to be seen an an instrument of colonial oppression.

What happened that day, then, must be established. It was not established by the Lord Chief Justice, Lord Widgery, in his report published three months after the event. The tone of his words was defensive and the imprecision of them lamentable. The soldiers had been fired on first, and some of the dead may have handled guns or bombs, it concluded - although there was no hard evidence for either assertion. Even so, the report criticised Army officers for abandoning the policy of low-key containment for aggressive arrests by snatch-squads, and said some of the soldiers' shooting "bordered on the reckless". The implication, left like the after-image of a flash on the retina of history, was that the Army might have been a bit heavy- handed, but a bunch of IRA sympathisers had been out to cause trouble or worse, so blame was not easy to apportion.

All the evidence at the time and since has pointed in a sharply different direction. It was an illegal march, to be sure: all marches and parades had been banned. The march took place in the context of civil disorder, barricades and a "no go" area. One of the teenagers killed was a member of the IRA youth wing. Some of the marchers had thrown stones and insults at the soldiers. But the march itself was overwhelmingly peaceful. There were no weapons or bombs - not even petrol bombs. Most of those killed had no association with sectarianism. An impartial analysis of the evidence should conclude that the main responsibility for the deaths lay with a small group of soldiers. Paddy Ashdown, who served in Northern Ireland immediately after the killings, said yesterday: "There was an acceptance there had been a very regrettable breakdown of discipline." But did they panic, or had they simply lost patience with civil rights activists and decided to teach them a lesson? There is a terribly important difference and it is quite right that, even after this length of time, a credible attempt should be made to discover the truth.

The inquiry announced yesterday is not simply historical, though. Unfortunately, there will be nothing quite so straightforward or saccharine as "closing this painful chapter once and for all", as Tony Blair suggested in his statement. Much of the value of a new inquiry is symbolic, in that it will put right the deep sense of injustice felt by the nationalists. Especially if, as seems probable, it leads to an apology from the Government to the victims' families. That is what matters, and we should brush aside the predictable complaints from blinkered Unionists and Conservatives about "pandering" to IRA propaganda. The inquiry should destroy the value of Bloody Sunday as propaganda for the IRA - and it is not as if the Unionists have anything to lose by establishing the truth.

However, it must be recognised that the Government has, far from closing a painful chapter in British history, reopened it. Much more pain will be caused before final closure can be achieved. It may be that the new inquiry will conclude that some officers gave orders they should not have given, and it is almost certain to find that some soldiers shot people they should not have shot. It is likely that at least some of those soldiers will be named and will still be alive. If the tribunal finds evidence of misconduct or even criminal behaviour, the Government will be forced to act against them. Alternatively, or in addition, the families of those killed on Bloody Sunday may be able to take legal action.

But this is not a sleeping dog which can be left to lie. Despite the killings of the past few days, the peace process, like a bicycle, is still moving forward and has therefore not fallen over. To maintain the momentum, the Government needs to convince both sides that it is even-handed. Being honest about past misdeeds carried out in our collective name is an essential part of that.