The no warning bomb that exploded outside MI5's headquarters was powerful enough to kill anyone within 100 yards.
While the blast appears to have been timed to coincide with the handing over of law and order powers from Westminster, security sources have said they do not do believe this was just a symbolic attack, but one that was designed to cause death and destruction.
The bomb — which was claimed by the Real IRA — is not believed to have contained a large amount of explosives, however its successful detonation shows that the dissidents appear to have perfected their bomb making techniques following recent failed attempts.
One security source said: “The device went off properly, everything that was there went off. Anyone standing within 100 yards, it would have been enough to kill you. It had the potential to kill but maybe they didn’t get close enough to where they wanted to leave it.
“I do not think it was a token gesture. There was enough there to kill or seriously injure.”
The live bomb was driven across Belfast after a taxi was hijacked in Ligoniel in north Belfast late on Sunday night. The driver, who was held for about three hours by armed dissidents, was ordered to take the bomb in his car to M15 HQ at Palace Barracks in Holywood, which is also home to a number of British army units. The driver’s family were held hostage in their home.
On arrival at the Old Holywood Road the driver got out of his taxi and told the security forces that there was a bomb in the car.
The PSNI said there were two explosions — first, when the bomb detonated at around 12.20am, and then shortly afterwards when the taxi's petrol tank exploded.
A pensioner nearby sustained minor injuries while a number of people being evacuated from their homes near the Old Holywood Road were later treated for shock.
Up to 60 residents were evacuated to Redburn Community Centre where they spent a sleepless night. One of the residents, 80 year-old Jane Carmichael said: ”We were lucky. Someone quite easily could have been killed.
“I’ve lived here for 50 years, throughout the Troubles, and this is the first time I've experienced anything like this. I was in bed reading when it went off, it was so loud, it made me jump.
“So we are here just waiting to get into our homes. Yes it is frustrating, but it just takes time.
“But everyone is in great spirits. My friend joked that the community spirit must have been like this during the Second World War.”
Gary McManus (42), who lived in the town for 36 years, was also waiting to go back into his house with his four children, William (15) Zoe (19), Robert (20) and David (22).
“As soon as me and my wife left the house the bomb went off. Debris was flying everywhere. The explosion was scary, I just went back into the house and got everyone out,” he said.
Mr McManus added: “I think by 7am people were just tired and wanted answers to their questions. But you can't let things like this get to you, you have to just live your life.”
Efforts to keep people entertained continued throughout the day with one suggestion sparking much needed laughter. “We are going to have a game of bingo, first prize is an overnight stay in this Community Centre,” one woman said.
Chairman of the Police Federation for Northern Ireland, Terry Spence, said the attack was “a wake-up call” to the Northern Ireland Executive, the Policing Board and the Police Service as to the seriousness of the dissident threat.
“The new beginning afforded by the transfer of responsibility for policing and justice should lead to a more determined and better resourced response to the security situation,” he added.