Although the timing of the warning could not be worse, senior detectives believe there are ``genuine concerns for public safety'' following comprehensive intelligence operations in Ireland and the UK and risk assessments by MI5.

With Christmas and millennium festivities fast approaching, the fear is that the dissidents are planning an attack which would wreck the delicate ceasefire. In a development which confirmed police concerns, Garda sources said last night that the army council of the Real IRA, the splinter group behind the Omagh atrocity which killed 28 people last year, had met at the weekend to discuss the best strategy for derailing the peace process.

It is believed the council's favoured option was a terrorist attack in Britain. Between 25 and 30 big companies and public utilities in Britain have been briefed about the threat, and security has been increased around the City and Dockland areas of London.

``We think it would be prudent to view a range of dangers from a variety of terrorist methods,'' the police source said. ``We have briefed a number of businesses and commercial interests.''The source added: ``There are very credible grounds on which the increased concern is based.''The source was sceptical about reports in a Sunday newspaper that members of a Republican ``active service unit'' were already in place in London and Manchester, but added: ``It could very well be that members of republican dissident groups could be here on the mainland already.''

The police have raised the risk assessment level to the second highest. The top level is for intelligence of an imminent terrorist attack or for involvement in a prolonged bombing campaign. ``The message to the public is prudent awareness and alert ness,'' said the source. ``Any suspicious telephone calls or threats should be brought promptly to the attention of the police.'' One of the problems faced by the police is that the Republican dissidents have not revealed a system of coded warnings that would help to distinguish genuine threats. The warning received before the Omagh bomb was ``recklessly misleading,'' said the source.

The threat from the dissidents covers the full span of terrorist activity, the source added, from postal and under-car devices to personal attacks on high profile MPs. The police believe the dissidents have a range of weaponry and attack methods at their disposal.

The source said the terrorists had the kind of engineering and logistics that have led to major attacks in Britain before. The home office terrorism and protection unit has warned VIPs and politicians who might be vulnerable to be extra careful, though it is understood the unit was not working to a specific hit-list drawn up by dissidents, relying instead on informed guess work.

Police believe there has been a drawing together of dissidents since the spring which has provided them with a pool of more than 10 suspects. The group consists of Republican hardliners from South Armagh and Dundalk, members of the Real IRA, disaffected elements of the Provisional IRA, Continuity IRA and the the Irish National Liberation Army.

The police do not think the new threat is being posed by IRA prisoners released from the Maze, but by new recruits helped by a hard core that may have been involved in planning previous atrocities.

iiThe Observer News Service