Garda Commissioner Martin Callinan has said dissident republican groups are both working with and extorting money from drugs gangs in the Republic.
The statement directly contradicts claims by the Real IRA that its members have been targeting gangs to pressure them to stop dealing drugs, mainly in working-class communities.
Mr Callinan said links between dissidents and drugs gangs were now a “cause of serious concern”.
“A relationship of friction and facilitation appears to exist between in this jurisdiction and some dissident elements,” he told the Oireachtas Committee on Justice.
“Taxing/extortion of drug dealers by dissident republicans have occurred in recent years.”
In recent months, as feuding between the Real IRA in Dublin and drugs gangs in the city has escalated, the 32 County Sovereignty Committee has claimed the violence has come about because of vigilante-style pressure being applied on gangs to stop dealing drugs.
On the issue of resources, Mr Callinan said numbers in the Garda had reduced by about 1,000 in the past two years. There were currently 13,472 members in An Garda Síochána.
He said it was clear that a target to reduce the force to 13,000 by the end of the year under the terms of the EU-IMF bailout would not be met.