Géaroid Cavanagh, 33, of Elmwood Terrace in Derry is charged with murdering Ms McKee on 8 April 2019.
Jordan Devine, 22, of Synge Court in Derry is also charged with her murder.
Both men are further charged with possession of a firearm and ammunition with intent to endanger life, riot, possession of petrol bombs, throwing petrol bombs and arson.
Cavanagh is also charged with robbery on the same date.
When asked if he understood the charges, Cavanagh responded that they were ‘ridiculous’.
The prosecution said that Cavanagh had been observed at the Saoradh office earlier in the day and alleged he had thrown three petrol bombs during the course of rioting.
Ms McKee, 29, was shot dead while observing rioting in Derry’s Creggan estate on Thursday, April 18, 2019.
A prosecuting lawyer said the police case was that the two defendants were with the gunman who fired the shot on the night that Ms McKee was killed.
A detective told the court that Géaroid Cavanagh “escorted” the gunman on the night of the killing.
He said Cavanagh had been identified from images of the night, and was also linked to the scene through a burned zip fastener which was found nearby.
A defence lawyer said it was “absolutely beyond belief” that Géaroid Cavanagh could be identified from the images.
The court heard that Jordan Devine “encouraged” the gunman by punching the air and cheering, and by lifting items from the scene.
The prosecution said Devine had been observed outside the Saoradh offices on Chamberlain Street in the city earlier in the afternoon on the day of Lyra McKee’s murder.
They alleged Devine was an individual captured on footage encouraging the gunman by punching the air, throwing a missile, and then tidying up items on the ground around the scene.
Prosecution also claimed the defendant had thrown around 12 petrol bombs during the course of the rioting, and that he had also been involved in hijacking and burning a van.
A defence barrister said there was “simply zero sustainable evidence” against Devine and that “in the old days” the case would have been “laughed out of court.”
A third man, Joe Campbell, 18, of Goshaden Cottages in the Ardmore area of Derry also appeared in court via video link on Friday.
Campbell is charged with riot, possession of petrol bombs and throwing petrol bombs on the night Ms McKee was killed.
The District Judge Barney McElholm said there was “nothing new in the case” and that he was not going to comment on the evidence.
He granted all three men bail with conditions to appear again on October 7.
Bail of £750 was granted to Cavanagh, with a cash surety of £25,000 offered by the defendant’s parents.
A 9.00pm curfew was also imposed and he is to be monitored by electronic tag.
Devine was granted his own bail of £750 with a surety of £750.
He will also be subject to a 9.00pm curfew and be monitored via electronic tag.
Campbell was released on his own bail of £750 with a cash surety of £2,500 to reside at Goshaden Cottages.
He was forbidden from entering the city and a 9.00pm curfew was imposed.
Campbell is to have no contact with his co-accused throughout the bail period.
The prosecution indicated they would appeal the granting of bail for all defendants before the High Court in Belfast.
A 19-year-old man, who was also arrested during the same police operation this week, has been released pending a report to the Public Prosecution Service for a number of alleged offences.
Derry man Paul McIntyre is already awaiting trial charged with the author’s murder on Thursday, April 18, 2019.He is further charged with rioting on the same night.
Another man, Christopher Gillen, is also accused of rioting on the same night.
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