A van bomb found near the border contained 600lbs of homemade explosive and was "ready to go", police revealed today.
A senior officer confirmed the device was larger than had originally been estimated and could have caused devastation.
The white Citroen Berlingo van was spotted by a member of the public on Thursday evening after it was abandoned on a border road outside Newry in Northern Ireland.
The security operation on the vehicle only ended late last night and District Commander Chief Superintendent Alasdair Robinson today said it could have caused major loss of life had it detonated.
"The device contained two blue barrels with 125kg of homemade explosives in each one, and a detonator - all the equipment which meant this device was ready to go," he said.
"To explain it, there was 600lbs of explosives.
"This was a very significant device. If this had exploded it would have caused devastation."
Dissident republicans opposed to the peace process are being blamed for the failed attack.
The same groups have been linked to the discovery of a smaller explosive device, plus a weapons cache, in north Belfast last night.
Newry's courthouse was damaged by a major car bomb in 2010, but Mr Robinson said the latest find was twice as big as the bomb used in that attack.
He said of the van bomb: "To put it in perspective - anyone within 50 metres of this device would have been killed and anyone within 100 metres, seriously injured."
The alert was raised when the vehicle was spotted abandoned on the Fathom Line road outside Newry on Thursday.
Mr Robinson said the likely target, and the reason for the device being abandoned, were unclear.
But the senior officers said the presence of regular police patrols had forced bombers to abandon devices in the past.
"We were alerted to this vehicle by a vigilant member of the public who noticed this van earlier in the afternoon and again around 4.30pm," he said.
"I would like to thank the public for their support and ask for their continued help. I would appeal to anyone who noticed this Citroen Berlingo van in the area on Thursday or even prior to this to contact us."