During the Irish War of Independence, Clancy became immersed in the underground movement and carried out a number of daring feats, which ensured his rise to become the second-in-command of the Dublin Brigade, IRA, with the rank of Vice-Brigadier. He was also attached to GHQ where he held the rank of Director of Munitions. His immediate superior was his Easter Week colleague Dick McKee. The escape was considered a major coup by Republicans and was a boost to morale.
The Squad, also known as the Twelve Apostles, was a counter-intelligence unit established in September 1919. This unit was to function as an urban flying column, which was to specialise in the killing of British intelligence agents and those police who were attentive in combatting the IRA. At its inaugural meeting the IRA leadership was represented by Peadar Clancy, along with
Dick McKee, Michael Collins and Mick McDonnell. Clancy was also involved in the Republican breakout from
Strangeways Prison in
Manchester, England on 25 October 1919. Michael Collins had taken a particular interest in the escape, and actually visited
Austin Stack in the prison to finalise the arrangements. In all six prisoners were to escape, among them Piaras Beaslaí who had again been arrested. On 19 December 1919, the Squad assembled at Kelly's, known locally as the Halfway House, on the
Navan Road in
Cabra. They planned to ambush Lord French, as he made his way from
Ashtown railway station to the
Phoenix Park. The Lord Lieutenant escaped the ambush, but one of the Volunteers,
Martin Savage, was killed. On 11 October 1920,
Seán Treacy and
Dan Breen narrowly escaped capture while staying in a safe house in Fernside, a middle class area of Dublin. Professor Carlon, the owner of the house, was later to die as a result of the attack on the house, along with five British soldiers. Clancy and McKee became actively involved in the protection of both Breen and Tracy. On 14 October 1920, the Squad, along with Dick McKee and Peadar Clancy, planned to assassinate
Hamar Greenwood, and
General Tudor, two of the top British officers in Ireland. They met in the back of Clancy's shop, The Republican Outfitters, in
Talbot Street. When they received intelligence that neither of the officers would be present at the intended event, the operation was called off. As some of the Squad was leaving they met
Seán Tracy, and informed him of events. Tracy continued on towards the shop. Tracy was in the process of planning the rescue of
Dan Breen, who lay wounded in the
Mater Hospital. They had learned that the hospital was to be raided, and wanted to get Breen out in time. According to
Dan Breen, Tracy had been so intent on providing for his safety that he had neglected his own. Tracy had been followed to The Republican Outfitters, and he had failed to notice. The others had not moved much further when they heard the shots ring out. A raid on the shop had been planned, and Tracy had arrived just before the soldiers. Clancy was at
Nelson's Pillar when he saw the trucks filled with soldiers pass, he surmised that the shop was to be raided, but had no way of warning his comrades. Tracy, along with two civilians, was killed in the incident. McKee only narrowly avoided capture, by escaping on a bicycle during the confusion at the time of the shooting. On 20 November, Clancy, along with members of the GHQ staff, met at 35 Lower
Gardiner Street, Dublin. The meeting was called to discuss the final arrangements for what would be the rout of the British secret service, with the elimination of the
Cairo Gang.
Cathal Brugha felt there was insufficient evidence against some of those named, and there was to be no room for doubt. Collins stated that the operation must be done at exactly 9am. Collins remarked: "These whores, the British, have got to learn that Irishmen can turn up on time." ==Arrest and interrogation==