Prosecutors detailed its history as a man on bail accused of possessing the pistol had his police bail signing conditions reduced.
Ms McKee, 29, was shot dead as she observed rioting in the city’s Creggan area in April 2019. Dissident republican group the New IRA later claimed responsibility for the killing.
Niall Sheerin, a 28-year-old bookmaker of Tyrconnell Street in Derry, denies charges of possessing a firearm in suspicious circumstances and possessing a firearm with intent to endanger life.
The Hammerli .22 pistol and eight rounds of ammunition were discovered wrapped in bin liners in a hollow behind a telegraph pole during searches in the Ballymagroarty area of the city in June last year.
Tests confirmed it was the same weapon used to kill Ms McKee, the court was told.
Crown lawyer Robin Steer said: “Police have also found that the firearm had been used in four paramilitary-style assaults between September 2018 and March 2019.
“Four men were shot in the legs by this firearm, and on two occasions the victim was even able to describe that it was a small black gun.”
Partial DNA profiles said to match Sheerin’s were obtained from the pistol’s loading mechanism and magazine.
“It’s 70 millions times more likely the DNA found on the magazine belongs to him than somebody else,” Mr Steer contended.
He argued that this indicated the accused had the gun in his physical possession.
Sheerin was granted bail last July, with conditions including an obligation to report to a PSNI station on a daily basis.
Opposing his application to reduce those terms, the prosecution cited a further recent spate of paramilitary-style shootings in Derry.
“There have been four incidents since January of this year,” Mr Steer said.
On January 6 a man was driven to a wooded area in the Creggan and shot in both legs. Two days later a second victim was targeted in the same area, sustaining a wound above the knee.
On February 6 another two men were subjected to similar attacks in a Creggan alleyway. One of them had ben shot in the thigh and shin, and was taken to hospital in a critical condition.The daily signing condition is a proportionate and necessary restriction aimed at ensuring police know the accused’s whereabouts, it was submitted.
Sheerin is not accused of any involvement in Ms McKee’s death, or any offences connected to the gun attacks.
Defence counsel Joe Brolly told the court his client “resolutely denies” charges he does face which are based on a DNA swab with no other surrounding evidence.
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