Paddy Farrell was used to danger. As one of the biggest drug traffickers in Ireland, he operated in a shadowy world where criminal associates had to be watched as carefully as enemies.

Running a cross-Border smuggling operation from Newry, he also had to keep his lines clear with the paramilitary organisations on whose turf he worked. And in the background was the constant presence of the RUC and the Garda, trying to intercept his drug movements, turn his contacts into informers, and move directly against him.

It was a high-pressure life but the 49-year-old Farrell had at least one place of refuge: the upstairs bedroom of a small house across the Border in Drogheda, where he spent time with his 29-year-old girlfriend Lorraine. It was the last place he would have expected to die a violent death, a drug smuggler's death.

The blast from both barrels of a shotgun killed him as he lay on her bed on Wednesday. She died moments later, also from a blast to the head.

The discovery of their two bodies shocked the small street beside Our Lady's Hospital in Drogheda, where Ms Farrell lived with her mother and her mother's partner. Neighbours clustered on their doorsteps, shaking their heads in bewilderment and remembering "a lovely, friendly girl" who always had a kind word. Behind the scenes there was intense Garda activity, as officers worked to establish whether the shootings really took place as they appeared, or whether Paddy Farrell's death was a set-up in a drug gang or paramilitary feud.

Senior officers gathered in Drogheda to discuss the death of a man who was moving to fill the gap in Dublin's cannabis market caused by the break-up of another gang by Lucan-based gardai. The officers were soon satisfied that unless forensic or post-mortem examination results showed something new, they could conclude that Farrell had died at the hands of his lover.

Paddy Farrell had arrived at Boyle O'Reilly Terrace in Drogheda on Wednesday morning, parking his maroon-coloured Mercedes outside the terraced house where Lorraine Farrell lived. The car, which looked huge on the narrow crescent-shaped street, was still outside when her mother Peggy, and her mother's partner, arrived home from work at about 6.30 p.m.

The two, who run a taxi-business in the town, watched the international soccer match on television, believing Paddy and Lorraine were asleep upstairs. It was not until Peggy's partner, Dessie, went upstairs after the match, they told gardai, that he realised something might be amiss. When he walked into the bedroom he shouted in shock.

Paddy Farrell's body was on the bed, Ms Farrell was lying on the floor, a shotgun by her body. Two spent shotgun cartridges were also lying in the room - evidence of the first blast of the shotgun before it was reloaded for the second blast. A doctor was called, but only for the formalities.

Ever since a large cannabis shipment into Co Wexford was intercepted by gardai three years ago, Paddy Farrell had been a target of Garda and RUC operations. He was considered a major and careful trafficker, one who would arrange shipments but stay in the background. He is believed to have had former members of the INLA among his gang.

Earlier this year one of his young criminal associates was targeted in an operation involving a consignment of cannabis left near a hotel on the Dundalk to Belfast Road. The Garda and RUC monitored the scene, but nobody collected the drugs, and the hoped-for link to the Newry car-dealer could not be made.

Farrell had a complicated love life. Previously he had lived in Britain, and police sources believe he had a partner and children there who later moved to Australia. Yesterday suggestions emerged of other girlfriends. However, a statement, issued of behalf of Ann Farrell, Mr Farrell's wife, by a firm of solicitors, insisted that Mr Farrell "resided with his wife and family and enjoyed a happy and stable marital relationship".

Lorraine Farrell, in whose bed Mr Farrell died, was a bright, cheerful 29-year-old, who met him when she worked in Newry. They were not related. About a year ago she moved back to her mother's house in Drogheda, but maintained their relationship.

It appears that she was deeply in love with him, and when he suggested breaking up with her she "went off the rails," according to one source. In the days before their deaths she was behaving in a chillingly methodical fashion.

She borrowed a shotgun from a friend who was selling the legally held weapon. She also enquired about the cost of graves at the local cemetery, made a £100 down payment on a plot and asked about the cost of headstones.

When Paddy Farrell arrived at her home on Wednesday, she was prepared.

The link between Mr Farrell's activities and the manner of his death, and yesterday's car bomb which partially exploded outside the premises of the taxi business where Ms Farrell's mother and her mother's partner worked, has yet to be explained. The car was stolen in Newry, fitted with false number plates and driven down to Drogheda.

It might have been placed there by criminal associates of Farrell. But their motives are unknown. There was speculation it was some simple type of retribution over the death of their leader, or a sinister warning to anyone considering moving in on their drug patch.

Meanwhile, the solicitor acting for Mrs Farrell said in the statement that allegations that Farrell was involved in drugs were "completely unfounded".