The linking on Friday of the Irish Republican Army (IRA) to the 26.5 million pound ($49.72 million) heist at the headquarters of Northern Bank in central Belfast last month is a huge blow to Anglo-Irish efforts to seal a final political settlement in the British-ruled province.
"On the basis of the investigative work we have done to date in my opinion the Provisional IRA are responsible for this crime," Chief Constable Hugh Orde said. He declined to give details of the intelligence this was based on.
The IRA and its political ally Sinn Fein denied the group was behind the raid, in which the families of two bank workers were held hostage. They said the allegations were an attempt to demonise Sinn Fein, the largest Catholic party.
"Hugh Orde's comments today are nothing more than politically biased allegations," said Martin McGuinness, Sinn Fein's chief negotiator.
The bank withdrew all its
notes after the robbery
"He has not produced one scrap of evidence. Within days of the robbery I asked the IRA about this and was assured that they were not involved."
Protestant unionists, who support ties to Britain, seized on Orde's comments as evidence the IRA remains involved in crime and low-level violence despite the ceasefire it called in 1997 in its armed campaign against British rule.
Blow to peace
"I think that we have exposed that Sinn Fein are not sincere about peace," said Ian Paisley Junior, son of the hardline leader of the province's main Protestant party and a member of Northern Ireland's Policing Board.
"They want their crime and they want to be able to go into politics. Well, they can't have both. It is over for them and I believe the process is now over for Sinn Fein and we must move on without them," he told Sky television.
Attempts by London and Dublin to broker a deal to revive a power-sharing government at the heart of a 1998 peace deal stalled last month. Agreement faltered over the issue of photographs of the IRA putting its weapons out of use.
"I think that we have exposed that Sinn Fein are not sincere about peace"
Policing Board member Ian Paisley Junior
The largest Protestant party, the Democratic Unionists (DUP), insisted this was essential. The IRA would not agree to a request it said was simply designed to humiliate republicans.
Irish Prime Minister Bertie Ahern called Orde's remarks deeply worrying. "The attribution of the robbery to the Provisional IRA represents a serious setback for the political process in Northern Ireland and is corrosive of the public confidence that we have been seeking to create," he said.
A spokesman for Tony Blair said the British prime minister took these latest developments very seriously.
"He has made it repeatedly clear over the past two years that the political institutions in Northern Ireland can only be restored if there is a complete end to paramilitary activity by those involved, and that included all criminal activity."
Northern Bank announced on Friday that it would withdraw all its paper banknotes in circulation and replace them with new ones in different colours at a cost of up to five million pounds ($9.4million).
"So, in essence, this large robbery has become the largest theft of waste paper in the living history of Northern Ireland," said Orde.
Police said the final tally of the haul stolen was 26.5 million pounds sterling, up from their original estimate of 22 million.
Around 22 million was in notes issued by the Northern Bank.