A bomb left near Derry's courthouse has been made safe after a security alert lasting more than 12 hours.
Dissident republicans are being blamed for leaving the bomb which was "a substantial viable device," according to the PSNI.
The 50kg bomb was made up of homemade explosives and contained in a beer keg which was left in a stolen car in a carpark close to the court house.
A telephone bomb warning was made. One line of inquiry being examined is that the device was abandoned in the carpark before the bombers were able to move it closer to its intended target.
Police are blaming either of two significant dissident groups - the Real IRA or another grouping styling itself Óglaigh na hÉireann - which have been active in Derry over the past year.
The alert severely disrupted the city centre around the Bishop Street causing the evacuation of the court house, St Columb's Cathedral and the deanery, a Masonic hall as well as a nearby housing development for the elderly. Residents were taken to a hotel last night.
The bomb was made safe around mid-morning and the scene remained sealed off for most of the day as forensic specialists examine the area and the device. The cordon has now been lifted.
District commander Stephen Martin said: "If a bomb such as this had gone off it would have killed or seriously injured people. It would have caused substantial damage to nearby property; to the courthouse, to the Masonic hall, to the deanery, to other residents. It would have probably damaged the residential home, Alexander House.
"It's just a highly built-up, residential part of the city within the walls and a device this size would have caused considerable devastation."
He added: "It's two years since the threat in Northern Ireland has been escalated to severe and acts like this are a strong possibility. They can come at any time without warning."
Condemnation of the incident has come from across the political spectrum in Derry.
Sinn Féin Assembly member Martina Anderson said: "An attack on any place in this city is an attack on us all."
Addressing the bombers directly, she added: "The people's focus will be back on building for the future as soon as the debris is cleared but you will still be stuck in the past with not a progressive thought between you. So get real, pack up your tent and go home. The peace and political processes will continue to strengthen, in spite of the wreckers."
SDLP Foyle MP Mark Durkan said: "If those behind this think they are doing something to damage the legal system they are not. They are just damaging the people of Derry - damaging their daily lives as they go about their business in these very difficult times for everyone."
DUP Assembly member and the outgoing Stormont Speaker William Hay accused the bombers of attempting to cause maximum disruption in defiance of the wishes of the people of the city.
The Ulster Unionists also condemned the attempted bombing.