A group of former Provisional IRA bombmakers are believed to have joined dissident republicans to play a key part in the dramatic rise in attacks in Northern Ireland, according to security and military sources.
The new threat comes as the head of MI5 revealed his service now has to deal with "more life-threatening investigations" in Northern Ireland than the rest of the UK.
The increased violence has meant the number of agents needed to be boosted by a third, with tightly stretched resources moved from operations against Islamist terrorists.
The escalation of violence in Ulster comes at a particularly difficult time for the security and intelligence services.
There has been no respite in the activities of al Qaeda and its associates. The agencies face economic constraints along with other government departments.
There have been 49 bombings in Northern Ireland in the first eight months of this year, compared with 22 in the whole of 2009, and many of the devices show a new level of expertise and sophistication.
Bill Clinton, who helped broker the Good Friday Agreement when he was United States President, is to revisit Belfast next month in a fact-finding trip on the fraying security situation.
A primary school in Antrim sent 400 pupils home yesterday after an 8-year-old boy carried a pipe bomb into class. Headmaster Hilary Cush said: "It's absolutely crazy, it's unbelievable that innocent children should be caught up in something like this."
Some of the materials used in the IEDs (improvised explosive devices) are believed to be from stockpiles gathered in the early 90s, including Semtex boosters which should have been destroyed under the decommissioning terms of the Good Friday Agreement.
The scale of the problem was revealed by Jonathan Evans, the Director-General of MI5, who told the Commons Intelligence and Security Committee: "What was not anticipated ... was the way in which the situation in Northern Ireland had deteriorated. The Service had considerably more what we would call priority, that is life-threatening, investigations in Northern Ireland than we do in the rest of Great Britain."
MI5 has increased its resources in Ulster from 13 per cent to 18 per cent. This figure, according to Whitehall officials, may have to rise again if the security situation continues to deteriorate.
It was claimed last month that the dissident groups were preparing to carry their campaign into mainland UK with a possible "spectacular" aimed at this autumn's Conservative Party conference, in Birmingham.
Patrick Mercer, former chairman of the Commons Subcommittee on Counter-Terrorism, maintained: "There are three groups which are planning to do something to catapult themselves into the headlines before the party conference season.
"They wish to kill ... They have an aspiration to attack targets on the mainland, including the Conservative Party conference."
Yesterday Mercer said the dissident groups may have also obtained commercial explosives from the Balkans. He added: "What appears to have happened is that hardline republicans who could never be brought to the negotiating table had been sitting on their hands for the last 10 years waiting for the moment to rejoin their war."
Security officials stressed that there was no evidence that either Sinn Fein or the former Provisional IRA leadership are involved in giving any support to the dissidents.
A Whitehall source said: "In the past, PIRA [Provisional IRA] may have taken punitive action against those who are doing this.
"But they haven't and we should be thankful for that because the last thing we want is a civil war between the nationalists on top of everything else."
The three main dissident groups - the Continuity IRA, Real IRA and Oglaigh Na Heireann - have lost a significant number of their senior activists to arrests and convictions.
The ranks have been replaced to an extent by young recruits from the nationalist community disillusioned with the peace process and limited employment prospects.
But, security forces point out, they cannot bring the expertise provided by those who had been long involved in the campaigns of the Troubles.
As well as IEDs the breakaway nationalists have used "proxy bombs" - hijacking taxis which have access to security installations and forcing drivers to transport explosive devices.
A 68kg device was used in a blast at the entrance of MI5 headquarters at Palace Barracks in Holywood. A 113kg bomb went off outside a police station in Derry.
In an interview with the Irish News, a member of Oglaigh Na Heireann claimed: "There are members of our organisation who came from within the ranks of the IRA and had sat back and given Sinn Fein breathing space to make the [Good Friday] Agreement work and achieve their goals. That didn't happen.
"Before we embarked on a campaign we set about acquiring arms and explosives.
"As the recent upsurge shows, we have the material required to carry out the campaign we have envisaged.
"It's OK for people to say we don't have the capability. A year ago they said we couldn't even detonate a bomb."
- IndependentBy Kim Sengupta