The cache of 35 kg of commercial explosive seized by gardai on Wednesday is understood to have been stolen from a mining company in Co Tipperary and transported across country to Co Waterford by members of the Continuity IRA.
According to Garda sources, the operation was overseen by the "chief-of-staff" of the Continuity IRA, a man in his 60s from Co Limerick. A young Tipperary man, who is also a member of the FCA, is suspected of having stolen the explosives. Another man from Tipperary is suspected of having transported them to Waterford.
The group was building up the cache of explosives apparently with the intention of transporting it to England for a bombing campaign there.
Gardai are concerned that the Continuity group is recruiting young people with no history of involvement in republican politics or paramilitary activity. These are being inculcated with doctrinaire militant republicanism in the same way that recruits to the Provisional IRA were during the 1970s and 1980s.
Although the Continuity IRA is still small there is concern among gardai that the group is still able to attract young, idealistic people.
The recruiting agents are said to be choosing their targets carefully. They generally reject former Provisional IRA members and anybody with any involvement in criminal or illegal activity. In this respect the Continuity IRA differs from the "Real IRA" group which carried out the Omagh atrocity in August 1998.
The "Real IRA" has a far more open recruitment policy. Most of its recruits are former Provisionals, and there are also criminal elements. This has made the "Real IRA" easier to infiltrate by both police and the Provisionals. It also explains why the Garda and the RUC have had successes in intercepting bomb attacks in the North and in arresting its members.
The two IRA groups have a working relationship, particularly in the Border area, Garda sources say. But there are still strong ideological differences. At leadership and political levels the groups are separate.
There is a strong cultural difference in that the "Real IRA" is heavily engaged in smuggling and other crime while the Continuity IRA leadership has forbidden its members to become involved in criminal activity.
The "Real IRA" received its first shipments of guns from the Border drug-smuggler, Patrick Farrell, who was shot dead by his girlfriend in September 1997.
But, because of their working relationship, the Continuity IRA was able to source weapons in former Yugoslavia while the "Real IRA" was able to provide the funds for the weapons.
Some gardai forecast that, in the long run, the Continuity IRA will continue to survive but that the "Real IRA" will succumb to internal corruption and decline because of its involvement in criminal activity.
Apart from the Garda and RUC successes, the anti-Belfast Agreement republican dissidents are coming under pressure from Provisionals.
The Provisional IRA has stepped up its assaults on people it regards as threatening its position. IRA members in Ballymurphy shot dead Joe O'Connor, the leader of a local group of "Real IRA" dissidents, on November 13th.
On Sunday, December 17th, a 22-year-old man was abducted and shot in both ankles, wrists and one elbow. The following night a 28-year-old man was abducted in the north Armagh area and taken to Silverbridge in south Armagh where he was also shot in each ankle, each knee and once in the right arm.
On the evening of December 16th the Provisional IRA also shot a 17-year-old in the ankles in Belfast.