Writing in The Telegraph on Sunday, the Labour MP said deals were done with all sides for "the greater good of peace" and those involved in government during the process have nothing to hide.
He also said it was "risible" for politicians to claim they had no knowledge of the so-called comfort letters, which were sent to those who may be wanted to answer for crimes committed prior to the Good Friday Agreement.
In the past week controversy raged in Northern Ireland after the trial of John Downey, who was previously suspected of involvement in the London Hyde Park bombing in 1982, collapsed.
Mr Downey was informed by the PSNI in 2007 that there was no interest in him from them, or any other police force across the UK.
This proved to be inaccurate as it later transpired that the Metropolitan Police in London wanted to question Mr Downey, who has always denied involvement in the bombing.
First Minister Peter Robinson threatened to resign over the existence of the letters.
The DUP leader withdrew the threat when Prime Minister David Cameron ordered a judge-led inquiry into the process on Thursday.
In his Sunday Telegraph piece, Mr Hain dismissed the idea that the letters were effectively a "get out of jail" free card.
He also detailed what the letters sent to the so-called on-the-runs said.
The Secretary of State for Northern Ireland has been informed by the Attorney General that on the basis of the information currently available, there is no outstanding direction for prosecution in Northern Ireland, there are no warrants in existence nor are you wanted in Northern Ireland for arrest, questioning or charge by the police. The Police Service of Northern Ireland (PSNI) are not aware of any interest in you from any other police force in the United Kingdom.
Letter sent to 'on-the-runs'
He added: "Crucially the letters state that if circumstances changed and offences came to light, they would be dealt with in the usual way.
"So much for 'get out of jail cards', immunity or amnesty."
He continued: "Resolving the issue of the 'on-the-runs' was absolutely essential in order to make progress in Northern Ireland.
"Without that, I do not think we would have arrived at the situation when, on my watch, on July 28 2005, the IRA declared a historic end to its war."
Mr Hain suggested that if a line was to be drawn on the past it must include ending the pursuit of paratroopers involved in Bloody Sunday and others responsible for crimes during the Troubles.
In the past week billboard advertisements were put up around Londonderry appealing for witnesses to contact the police about the 1972 atrocity which resulted in 14 deaths.
Police have said the public's response to their investigation has so far been "disappointing".
"Diverting police time to investigate Bloody Sunday soldiers or crimes from the Troubles seems a waste when the priority today should surely be tracking down the tiny, but dangerous, attacks from dissident IRA groups, as well as facilitating ordinary, plain community safety," Mr Hain said.
I remain of the view that Northern Ireland looks over its shoulder too much at the past, rather than to the future.
Writing in the newspaper, the Labour MP said it was time - as the Eames-Bradley report and Richard Haass have argued - to find a comprehensive and inclusive way to deal with the past.
"Peace and stability was hard-won and must not be allowed to slip because of this controversy.
"I welcome the Prime Minister's review of the operation of the 'on-the-runs' scheme to make sure no errors were made.
"None of us on the government side have anything to hide. We acted honourably throughout.
"The peace settlement we delivered was designed to ensure that there are no more victims like those of Hyde Park.
"But settling old scores at the expense of that process will serve no victim."
Reacting, Sinn Féin MLA for Foyle Raymond McCartney said the comments were "ill-judged and ill-timed" following the Saville inquiry's findings and amid the ongoing PSNI investigation.
"Sinn Féin have always supported the families of those killed by the British army on Bloody Sunday.
"Some of those families wish to seek prosecution against those responsible for the death of their loved ones," he said.