The IRA is active in a vast cigarette and fuel smuggling racket alongside British criminal gangs, according to a report.
This is making them "perhaps the most sophisticated organised criminal grouping to be found anywhere in Europe, possibly anywhere in the world."
The claim was made by Northern Ireland minister Ian Pearson in response to a BBC investigation which claimed that the IRA was involved in large-scale smuggling and the laundering of hundreds of millions of pounds.
According to a former head of the RUC special branch, Bill Lowry, IRA members forged links with British gangsters while they spent time in high-security jails. Mr Lowry made the allegation on Radio 4's File on Four.
Police and customs sources, quoted by the BBC, also said the IRA ran a substantial smuggling racket centred on south Armagh.
Sinn Féin denounced the claim, calling Mr Lowry a "discredited securocrat with no credibility".
Mr Lowry said: "They [the IRA] have a network within the criminal community in mainland UK. A number of them did a lot of jail time in high-security jails and made good friends, so they have contacts through that. They spread throughout the whole UK and in the Republic of Ireland. They have a very, very good network for dealing with bringing in guns, bringing in cigarettes or diesel smuggling. They have a system and it works extremely well."
Mr Pearson said: "The Provisional IRA is a highly disciplined organisation. It has a clear structure. They have been at this for a considerable period of time and, as a result, they are very clever at what they do."
He stated bluntly that organised crime was going to take a long time to tackle. "This isn't going to go away. There's no sudden thing that any government anywhere in the world can do that will mean that organised crime disappears. It's going to be a long battle. It's been a long battle to date."
The BBC quoted police and customs sources on both sides of the Border who said the IRA is involved in a "significant percentage" of cigarette and fuel smuggling in the UK.
The IRA uses some of Britain's leading criminal gangs as a distribution network for tobacco on which no duty has been paid, it was claimed. Expert techniques were used to remove the dyes from low-tax diesel intended for agricultural or central heating use in order to allow it to be used illicitly by road vehicles.
Last month customs intercepted fuel tankers bound for Liverpool from Dublin, which had been disguised as trailers carry- ing timber to conceal their cargo, the programme reported. It was believed that almost five million litres of laundered fuel are being sent across the Irish Sea by one IRA group alone.
Sinn Féin's Michelle Gildernew, MP for Fermanagh and South Tyrone, criticised Mr Lowry, suggesting his words were politically motivated. "Given his past involvement with the Special Branch and his direct role in the operation which led to the collapse of the Assembly and Executive, nationalists and republicans will not be surprised by the latest outburst from the mouth of this securocrat."