Police chiefs also believe rival factions in the Real IRA and Continuity IRA have come together as never before to mount late night attacks on so-called prestige targets with bombs assembled in the border regions of south Armagh and north Louth.

Former members of the Provisional IRA, opposed to the Sinn Fein peace strategy of Gerry Adams and Martin McGuinness are suspected of involvement in preparing some of the devices, according to authoritative security sources.

The threat level has been assessed as "severe" since February last year, one below "critical", the highest.

But in the aftermath of major bomb attacks outside a courthouse in Newry, Co Down, and then earlier this month at Palace Barracks, Holywood, Co Down, where the new Northern Ireland M15 headquarters is based, senior PSNI officers fear developing technical skills, as well as increasing numbers and growing confidence, could mean the dissident capability is back to where it was in the violent run up to the August 1998 Omagh atrocity when they blasted several towns and villages.

Twenty nine people, one of them a woman pregnant with twins, died in the Omagh bombing and even though the men accused of being responsible have been named, none has been convicted.

One source said: "The situation has got worse since the threat was raised to 'severe'. This is probably as severe a situation as we've seen since that Real IRA bombing campaign of 1997 going into 1998.... It feels to us, just looking at it in every way, that this has picked up in terms of intensity and severity."

The car bomb which went off outside Palace Barracks was deliberately timed to coincide with the transfer of policing and justice powers from London to Belfast, and with the General Election a fortnight away police are wary the dissidents may attempt to disrupt the electoral process.

There have been 10 attacks so far this year as well as the murder by the Real IRA of one of their own members Kieran Doherty, 31, in Londonderry, where he was abducted and shot in February.

Just over a year ago, Sappers Patrick Azimkar and Mark Quinsey were shot dead outside Massereene army barracks in Antrim. Constable Stephen Carroll was also killed when his patrol car was ambushed in Craigavon, Co Armagh.