THE INLA has ended its 20 month de facto suspension of violence and placed its units on standby. The paramilitary group has said it will operate from a "position of defence and retaliation".
Sources said the INLA could use a house raid, an arrest, or alleged harassment of nationalists by the British army or the RUC as a reason to launch a gun or bomb attack. "It will be a very loose interpretation of the word `defence'," said one source.
"If we believe that working class nationalists are coming under any threat from the State or loyalists, we will hit back," he said.
The SDLP deputy leader, Mr Seamus Mallon, appealed to the INLA to rethink its decision. It was a "difficult, complex and dangerous" time, he said, but "restraint and perseverance" were needed to reach a political settlement.
At a press conference yesterday, the INLA's political wing, the Irish Republican Socialist Party, denied the organisation was in the grips of an internal feud in which three people have been killed.
The IRSP spokesman, Mr Kevin McQuillan, said the "republican socialist movement" was under attack from two former members who were expelled and who had joined forces with "drug dealers and criminals".
"There are not two INLA factions involved. There is only one INLA," he said. In a statement yesterday, the INLA said the peace process had failed and it was no longer prepared to stand back in the face of "mounting provocation".
"We cannot look on idly as the British cynically draw out and fudge attempts at a negotiated settlement or while the full oppressive apparatus of the State is employed against the nationalist working class," it said.
The statement claimed the British government was pushing an "overtly unionist agenda". It warned that the INLA had the "numerical and logistical strength to protect our membership and class. If and when necessary, this will be clearly proven."
Although substantially smaller than the IRA, the INLA is well armed, according to security sources. The paramilitary group, which describes itself as Marxist, was formed 20 years ago.
It has carried out a number of high profile attacks during the conflict in the North. The last was in June 1994 when it killed three loyalists on the Shankill Road, in Belfast.
The present INLA linked dispute began last April when a statement was read out in a Dublin courtroom on behalf of four men arrested after an arms find in Balbriggan, Co Dublin. It declared an unconditional ceasefire.
The INLA leadership said this statement was made without its authority. The people behind the statement were expelled from the movement.
Those expelled now call themselves "INLA GHQ staff". Sources said they conspired with "well known criminals in Belfast and Dublin" in January to kill Gino Gallagher, who had taken over as INLA leader.
The INLA retaliated by killing John Fennell in Bundoran, Co Donegal, a fortnight ago. He was a member of the "GHQ staff" group. Last week, the INLA killed Barbara McAlorum (9) in a gun attack on a house in north Belfast.