Mr Ellis, a former TV repair man, was initially arrested in Dublin in May 1981 but jumped bail and fled to Canada, from where he crossed the border into the United States. He was arrested in Buffalo, New York, in 1982 on immigration offences.
An internal communication marked 'secret' from 1982 shows that a memo marked "secret" from the British embassy in Washington states: "As you know, one of those arrested has turned out on investigation to be Desmond Ellis, who was arrested in Dublin in May 1981 for possession of electronic remote-controlled devices.
"We understand that Ellis is linked by forensic evidence to some 50 murders in Northern Ireland and the Republic."
The document is one of a large tranche of British government files from 1982 that have been released by the National Archives in London.
The 1982 communication states that Mr Ellis was wanted in Dublin. It adds that, given his record, "we hoped that steps could be made to ensure that he was not simply sent back to Canada following next Tuesday's (immigration) court hearing and escape from justice."
It further adds that the authorities here wanted him returned to Ireland, but that it would be difficult to hold him in the US in the absence of an extradition agreement.
Mr Ellis was later extradited to Ireland and in 1983 he was convicted by the Special Criminal Court. He was sentenced to eight years' imprisonment.
Reacting to the revelations, Fianna Fail's leader in the Seanad, Darragh O'Brien, said many people want to know the real facts about the Troubles.
"A lot of people are seeking the true facts about what happened over the years of the Troubles, both those who were killed by the IRA and by the British army.
"Someone like Dessie Ellis, if he is connected with 50 murders, should at the very least make a statement on it and expand on it to say if it is true or not," Mr O'Brien said.
"If it is true I would imagine some of the cold case files are with gardai and with the PSNI.
"He should at the least make a statement and, if it is true, expand on it further or deny it.
"If it is true it is a matter for the gardai and they should pursue this," Mr O'Brien said.