The van used to transport a large mortar which misfired in a busy commercial part of Newry, Co Down, on Tuesday evening was stolen in Dundalk two weeks ago. It had been fitted with false Northern Ireland number plates.
The attack is seen as further evidence that the dissident republican group, now calling itself Oglaigh na Eireann, has established a safe bomb and arms manufacturing base somewhere in the Border area between south Armagh and north Louth.
The device used in Newry was similar to a heavy mortar perfected by the Provisional IRA in the early 1990s, known as a Mark 15. The IRA model could contain up to 100 kilos of explosive and had a range of up to 250 yards. It was last used by the IRA in an attack on the British army's Quebec Barracks at Osnabruck in Germany in July 1996.
The device used by the dissident republicans misfired and the missile travelled only about five yards from its launcher in the back of the stolen white Ford Transit van.
The missile and van in a car-park in the busy shopping area off Monaghan Street posed considerable problems for the British army's ordnance team as the mortar was in a highly unstable state.
A senior RUC officer yesterday described the attack as an "act of absolute madness". The mortar contained 200 lbs of explosive and could have caused great loss of life and injury, he said.
The dissident republicans, who support the aims of the breakaway Sinn Fein element known as the 32-County Sovereignty Committee, have carried out five mortar bomb attacks in the North since March, and on each occasion the missiles have misfired. In attacks in Armagh city, west Belfast and on Tuesday night in Newry the missiles landed in residential areas close to RUC stations. In none of the attacks has any of the missiles actually reached their target.
The North's Deputy First Minister, Mr Seamus Mallon, condemned the attack and called on the Sinn Fein leadership to use its influence to stop the group, who are all ex-members of the Provisional IRA, from carrying out further attacks. He also called on the Sinn Fein leadership to state that "their war is over".
Sinn Fein vice-president and Assembly member Mr Pat Doherty replied: "We are not interested in word games played out for the benefit of political parties and political leaders who are refusing to fulfil their responsibilities and who won't even engage in dialogue. Sinn Fein has delivered on all of our commitments."