PSNI forced to return billboard memorial for republican a day after it was seized in house raid
He was one of the 11 'Hooded Men' who claimed they were tortured by the security forces during the Troubles.
The banner was seized from a house at Rodney Parade in west Belfast on Friday along with a small quantity of drugs as part of an operation targeting the New IRA.
A man (52) was arrested and later charged with possession of a class A drug and offering to supply a class C drug.
A number of senior dissident republicans were in attendance at the event organised by the Irish Republican Prisoners Welfare Association.
Newry dissident Stephen Murney spoke at the event. He claimed that the seizure of the banner was 'effectively a PR disaster' for the PSNI.
He said Mr Hannaway was a member of the IRA 'up until the day he died'.
Mr Murney is one of three men charged earlier this year with managing a meeting in support of a proscribed organisation.
A statement released on Friday by Saoradh, widely believed to be the political wing of the New IRA, said the seizure of the banner of Mr Hannaway on Friday was an example of 'hypocrisy' by the PSNI after it refused to assist Belfast City Council with the dismantling of a loyalist bonfire in south Belfast.
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Solicitor Victoria Haddock of Phoenix Law said the banner was returned after pre-action correspondence.
She added: 'There was no lawful basis for the seizure of this mural... the seizure had no lawful authority under any search warrant nor any relevance to the offences for which my client was arrested.
'The bigger question for the PSNI is how they can justify the deployment of such draconian powers without any basis, at the very same time as refusing to exercise any power whatsoever to remove offensive and criminal materials placed on bonfires.
'Such exercises only give rise to questions about discrimination to which we now intend to pursue via civil proceedings.'
Ten years ago Mr Hannaway sought to overturn a controversial 1978 judgment by the European Court of Human Rights. It had described the treatment of the Hooded Men as 'inhuman and degrading', but not torture.
One of the barristers representing them was Amal Clooney, wife of Hollywood actor George Clooney.
In 2015 Hannaway was one of five men charged at the Special Criminal Court in Dublin with assisting the IRA.
He was convicted and jailed in 2018 for three years and nine months.
Hannaway, a cousin of Gerry Adams, was a founding member of the Provisional IRA but is understood to have disagreed with Sinn Fein strategy.
His support for dissident republicanism is believed to have caused splits within the families.
Adams' mother was Anne Hannaway, whose family is steeped in the republican tradition.
The PSNI said: 'Detectives from the Serious Crime Branch carried out a search at a residential property in Rodney Drive, west Belfast, on Friday, 11th July. During the search a number of items were seized.
'A billboard was removed from the property while it was established whether the possession of the item constituted any possible offence.
'Following review, the billboard was returned to the property on Saturday, 12th July.'
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