Among the welter of allegations under investigation by a team of detectives in Donegal are claims that explosives were stolen from Garda care and hidden in caches in the county and, in one instance, across the Border in Co Tyrone.

Another allegation is that cannabis was planted in a pub to justify a drugs raid by the Garda. This does not relate to any allegations being made by the family of the Raphoe publican, James McBrearty.

The intention behind these alleged actions, according to statements made to investigating officers, was to pretend that information had come to the Garda about IRA arms dumps and drugs through their own intelligence work. The explosives and drugs recovered were portrayed as arising from successful detective work.

One person has alleged that three caches of explosives were hidden by gardai in Donegal between 1992 and 1994. In one instance, it is claimed, explosives were hidden in Strabane, Co Tyrone, and information then passed to the RUC.

The incident in Strabane led to a day-long security operation in which hundreds of people had to be moved from houses.

One find concerned half a tonne of fertiliser-based explosive mix found in two disused buildings in farmland. A senior garda in Donegal said at the time that it appeared the explosives were for use in a single major bomb and it was believed the explosives had been manufactured in Donegal.

It was pointed out to journalists at the time that the two sheds were partly open to the elements and not suitable for the long-term storage of explosives. Contemporary media reports said this suggested the explosives were to be used in an imminent attack and that the Garda action had prevented this. The two caches consisted of over 500 kg of home-made explosive, ammunition, icing sugar and diesel.

Two other similar finds were made in 1994 in Donegal near the Border.

The principal allegation under investigation by a team of detectives, led by Det Supt Tadgh Foley from Co Monaghan, is that these caches of explosive were taken from a large haul, seized by Donegal gardai some time before 1993, which should have been in safe Garda stores to be used as evidence.

Between 1985 and 1994 Donegal gardai had by far the best record for arms and explosives seizures. In that period there were some 167 arms seizures in the division. By comparison there were only 93 in the Cavan-Monaghan division and 42 in the entire Dublin metropolitan area.

In the same period, 104 bombs were found in Donegal. The next-highest number in a Garda division was in Carlow-Kildare, where 64 bombs were found. There were 216 guns found in Donegal and 84,500 rounds of ammunition, again record amounts compared to other areas.

According to local Garda sources, the record finds in Donegal, at least before 1993, were based on a number of factors. The local Garda division had a very effective Special Branch contingent which penetrated and confronted the IRA to the point where the IRA in the north-west had almost collapsed by the early 1990s.

Typical was an operation in September 1992 in which local gardai confronted and arrested six heavily armed IRA men. The IRA was about to launch an attack across the Border at St Johnstone in north Co Donegal. Gardai were facing greater firepower in this incident but succeeded in capturing three assault rifles and two German-manufactured medium machineguns. The IRA unit was intending to shoot down a British army helicopter.

The RUC had also penetrated the IRA in Derry to the extent that at one point both the head of the IRA's bomb-making unit in the city and the second-in-command were acting as informants simultaneously. Their information, and the information of a number of other key agents in the IRA, has led to many arms finds.

Senior gardai say there is considerable concern within the force that the allegations about arms finds will undermine the successful fight against the IRA by local officers.

According to senior sources, the allegations are being taken seriously. However, any action will be determined by the outcome of the investigation led by Det Supt Foley. His report is due to be sent to the Director of Public Prosecutions at the end of this month.

If there are criminal charges, they will have to be disposed of before any other internal disciplinary action can arise.

However, according to senior sources, it is likely that the gravity of the situation - where allegations of a serious criminal nature are being made against those supposed to uphold the law - means there will have to be an inquiry. The most likely form, according to well-placed sources, would be similar to the kind being set up into the Dublin and Monaghan bombings, and into the controversy over the retention of babies' organs in hospitals.

In the Dublin and Monaghan bombings inquiry, the retired chief justice, Mr Justice Liam Hamilton, will carry out a private inquiry and provide a report for the Dail Committee on Justice, Equality and Women's Rights.

However, if charges or internal disciplinary actions arise in the Donegal case, it could be over a year before any such inquiry gets under way.