Anti-terrorist police on both sides of the border are investigating a possible link between a former member of the IRA army council and a bomb found in a Dublin hotel car park.
Officers now believe that the beer keg bomb was intended for use against a security forces target in Northern Ireland.
They think the unlocked car had been left for collection in the car park attached to the Finnstown House hotel in Lucan, west Dublin, on Saturday night.
Both the Garda and the PSNI are intrigued by the use of a Northern Ireland-registered car in the transportation of the bomb.
One senior officer said last night: "It is very strange that, if the bomb was manufactured in the south and was presumably for use by dissidents in the north, they should locate a car in Belfast for the job."
The beer keg contained all of the necessary components for a viable bomb, but had not been primed.
An initial examination indicated that it contained 66lbs of ammonium nitrate fertiliser and sugar.
It was also fitted with a timer – but that was destroyed in a number of controlled explosions carried out by an Irish Army bomb disposal team.
Gardai evacuated 330 guests from the hotel after the discovery.
Officers received an anonymous call about a bomb being left in the hotel car park and quickly located the black VW Passat car. Gardai spotted the beer keg with wires protruding from a timing device that had been attached to the bomb.
Officers initially suspected that the bombers had been 'spooked' by some Garda activity in the area and had abandoned the bomb there before fleeing.
Last night they said it was more likely it had been left there for collection and was due to have been taken across the border in the following few hours.
Subsequent inquiries by the gardai and the PSNI suggested the possible link between the bomb and the former senior Provisional IRA activist, who had been a member of the organisation's ruling army council.
The man is well-known to police on both sides of the border and has served a jail sentence in the past.
Officers said their investigation was still at an early stage and the connection was still being explored rather than confirmed.
Taoiseach Enda Kenny has condemned the incident as "madness".
Speaking at an event in Donegal attended by people from Londonderry, he said those who left the bomb in the car park did not represent the new Ireland.
"Those dissidents, who put that bomb in Finnstown House in Lucan, that's not the Ireland that we want", he said.
"That's not what Letterkenny stands for and it's not what Derry stands for."
Gardai have detained a man in his 50s on suspicion of involvement in an illegal organisation, but he is not being linked to the bomb.