Northern Ireland Chief Constable Mr Hugh Orde today set up a special team to reinvestigate the loyalist murder of a Catholic in Co Derry more than six-and-a-half years ago.
The PSNI said it had carefully considered the report by Mrs O'Loan into the murder and said it recognised there were "significant failures" in the original investigation.
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| Mr Sean Brown
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A statement said the service "regrets this and the distress caused to Mr Brown's family". They said they would keep the family fully informed during the new investigation.
The announcement came as Police Ombudsman Nuala O'Loan was preparing to publish a highly critical report into the investigation of the murder of GAA club chairman Mr Sean Brown, who was shot dead in Bellaghy, Co Derry.
The PSNI statement said the Police Service of Northern Ireland noted "that the Ombudsman found no evidence of police collusion in the murder" and that the police investigation at the time had not received the full co-operation of the community.
Mr Brown (61), chairman of the Wolfe Tones GAA club, was abducted as he locked the clubhouse gates in May 1997. His body was found beside his burned-out car later; he had been shot several times.
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Although a number of people belonging to the paramilitary Loyalist Volunteer Force were questioned, nobody was charged with the shooting.
The Ombudsman's office was called in because of the Brown family's dissatisfaction with the police inquiry. Mrs O'Loan's report is expected to confirm their belief that the investigation was badly handled, with many important documents going missing.
Sir Ronnie Flanagan was Chief Constable of the RUC at the time of the murder and this is the second major report by the Ombudsman which has been very critical of the work of some of his officers.