FBI agent Mr David Rupert has told the Special Criminal Court that alleged terrorist leader Mr Michael McKevitt wanted a "spectacular" to overshadow the August 1998 Omagh bomb to launch a new campaign by his dissident republican organisation.
Mr McKevitt told him that the new campaign would start with the beginning of decommissioning by the Provisional IRA.
Mr Rupert also said that Mr McKevitt told him of a "sleeper agent" in the US, a former French Foreign Legionnaire, who would be brought over in the event of a possible assassination attempt on the British Prime Minister.
Mr Rupert said that in a "comical twist", he signed a receipt for computer equipment he bought for Mr McKevitt's group in the US with the name Anthony Blair.
Mr Rupert (51), an American businessman who worked for the FBI and the British Security Service in gathering intelligence on dissident republicans, said he attended army council meetings of the new dissident organisation set up by Mr McKevitt in the wake of the Omagh bombing.
He understood that the "Real IRA" had ceased to exit after an army convention held on a beach in Inishowen, Co Donegal, in June 1999 and attended by members of the "Real IRA", the Continuity IRA, the INLA and the Provisional IRA. The organisation had become Óglaigh na hÉireann.
Mr McKevitt told him that after the Omagh bomb, the "Real IRA" had declared a ceasefire but this was tactical "to provide them with breathing room to regroup".
Mr Rupert, who was paid $1.25 million (€1.7 million) for his work, told the court yesterday he brought money raised by US support groups to Mr McKevitt and that he also brought four personal organisers, two laptop computers and a computer which he installed in the McKevitt home.
He attended army council meetings of Óglaigh na hÉireann in Greenore, Co Louth, at a house he later pointed out to gardaí.
It was the fifth day of the trial of Mr McKevitt (53), Blackrock, Co Louth, who has pleaded not guilty to membership of Óglaigh na hÉireann, otherwise the IRA, between August 29th, 1999, and March 28th, 2001, and to directing its activities between March 29th, 1999, and October 23rd, 2000.
Mr Rupert told Mr George Birmingham SC, prosecuting, that Mr McKevitt told him about two "sleeper agents" he had in the United States.
Mr McKevitt said one was a former French Foreign Legionnaire known as James Smith. Mr McKevitt said Smith was "particularly good" with weapons. Mr McKevitt said he had worked with him in South Africa on weapons-acquisition and steered him away from there to the US.
"I was told that he was on the level of profession that in the event that they wanted to do something on the level of assassinating somebody of the type of Tony Blair, he would be the person that they would bring home to do it," Mr Rupert said.
He subsequently met James Smith and he did not know if that was his real name.
He also attended "an engineers meeting" in Dundalk where he met electronics engineers and computer-type people. He was also introduced to a man who was "a bomb technician". They discussed a machine shop in the Republic where Mr McKevitt's group was trying to make Barrett .50 calibre-type sniper's rifles.
Mr Rupert also said Mr McKevitt spoke of being quartermaster of the Provisional IRA and of his involvement in the Libyan arms deals. He said Mr McKevitt was angry with President Moamar Gadafy of Libya because he "turned over McKevitt's details to the Brits" when he was trying to make a point with the British.
Mr Rupert told Mr Birmingham that Mr McKevitt also spoke of "assassination of cops". He took that to be a reference to the RUC as he gathered that gardaí were "off limits". Mr McKevitt spoke about taking his campaign to the steps of Stormont and the Assembly and to the financial district in the heart of Britain.
Mr McKevitt also told him that he thought there was going to be a problem with the Provisional IRA and he had issued an order to his people to get as many details on the local Provisional IRA people as they could.
A dissident republican in Derry, Micky Donnelly, had obtained details about Gerry Adams's holiday home in north Donegal but had sold these to the newspapers which put Donnelly "in a pretty bad light". Donnelly had wanted to shoot an RUC man in Derry but Mr McKevitt said he did not think that was going to be a big enough event and told him not to.
"The first hit of the new organisation he wanted to be a spectacular that would overshadow Omagh," Mr Rupert said.
The trial continues today.