Paul McIntyre arriving at court yesterday
Scuffles broke out between police and supporters of Paul McIntyre as he was remanded into custody after the hearing.
McIntyre, 52, is also charged with membership of a proscribed organisation and possession of a firearm with intent to endanger life.
Dissidents the New IRA claimed responsibility for the killing.
Lyra, 29, died last April while observing a riot in Londonderry.
She was said to be standing near a police vehicle when she was hit by a bullet fired by a masked gunman towards officers.
During a 50-minute hearing at Londonderry magistrates court, defence lawyer Derwin Harvey said: “The allegation... is that Mr McIntyre is at this riot and a male shoots the gun and that Mr McIntyre, after the gun was shot, picks up the cases.” Mr Harvey said that the case rests on a “snapshot” of low-quality mobile phone footage which prosecutors claim shows a man wearing clothing matching what his client was wearing earlier in the day.
Earlier, supporters of McIntyre, of Londonderry, held placards calling him a “political hostage” and “British scapegoat” as they scuffled with up to 40 police officers when they refused to move from the entrance to the court.
There were loud cheers as McIntyre was brought out of a Range Rover and taken inside. Ms McKee was living in Londonderry with her partner Sara Canning, who attended the hearing.
Before the case, Det Supt Jason Murphy of the Police Service of Northern Ireland said that “the quest for the evidence to bring the gunman to justice remains active and ongoing”.
McIntyre will next appear in court on February 27.