While it was unclear what caused last night's explosion, security sources believe that an "active service unit" was infiltrated into London last year by dissident republicans groups. It is also feared dissidents are attracting former Provisional IRA members in growing numbers. One senior figure said the dissidents now pose a "potent and growing" threat.
The dissidents' aim is to destabilise the peace process and make it difficult for the Sinn Fein leadership to make concessions on issues such as policing.
The growing threat posed by the dissidents has made it impossible for the RUC Constable, Sir Ronnie Flanagan to allow the demolition of British army watchtowers in south Armagh. The army remains in place at the request of the Chief Constable, who has indicated to the British government that if they are removed, it will reduce his force's intelligence-gathering capability in what is the heartland of dissident republicanism.
In the past month the dissidents in south Armagh and north Louth indicated they wished to mark the 20th anniversary of the beginning of the hunger strikes with some form of signal to the Sinn Fein leadership. The hunger strikes began on March 1st and it was anticipated there would be a high-profile attack around then.
Two weeks ago the dissidents came close to causing carnage when a mortar struck the junior officers' mess at Shackleton army B base in Derry. A minor technical error caused the mortar to fail.
If it exploded it could have killed or serious injured the 20 junior officers in the mess.
According to sources in the Border area, some important Provisional IRA figures have defected to the dissidents, bringing with them considerable technological expertise.
The dissidents were responsible for three attacks last year in London: on the Secret Service headquarters at Vauxhall Bridge in November; at Ealing Tube Station in July, and at Hammersmith Bridge in July.
The bomb at Hammersmith contained a timer-power unit (TPU) identical to a device found in a house in Ballyfermot, in Dublin last year. The RPG2 rocket used against the Secret Service headquarters was also part of a batch of weapons smuggled into the Republic from Croatia. The Continuity IRA and "Real IRA" have been jointly responsible for smuggling the weapons.