Security force sources said the 500lb bomb blast could have been approved by the army council of the Continuity IRA, which is vehemently opposed to nationalists being involved in the multi-party negotiations.
The organisation, comprising hardline former IRA members, has carried out a dozen attacks in the past few years, including one at a hotel in Enniskillen, County Fermanagh, in July l995 at the height of the tensions involving the Orange Order at Drumcree. It also planted a 500lb bomb at Banbridge, County Down, in January, which was defused by the police.
Unionists claim the CAC operate under a " licence" from the IRA, but this has been discounted by the security forces. The Provisionals' Army Council, say senior detectives, are increasingly worried by the activities of the splinter group which could sabotage carefully worked out "armalite and ballot box" tactics.
However, there are fears that the Continuity Army Council has access to IRA arms caches. One of its hierarchy is a former Provo quartermaster and the detonator for the Banbridge bomb was found to have been part of an IRA shipment from the US.
The RUC believes claims by the Ulster Unionists that the IRA was involved in Friday's bombing are premature. Instead, it is focusing attention on the activities of the Continuity IRA.
However, the IRA is not totally clear of suspicion over the bombing. The attack took place within hours of Sinn Fein's expulsion from the talks, and Moira, a predominantly protestant town, has a high number of police officers living there, so would be regarded as a legitimate target.
The bomb injured 10 police officers. All but one of the casualties were released from hospital after treatment. A blue Nissan Sunny, believed to have been the bombers getaway car, was later found burning on the M1, a few miles from Moira.
The police said the 20-minute warning given for the bomb was "totally inadequate". Chief Constable Ronnie Flanagan said: "Exactly what organisation is responsible, it's too soon to say."
Jeffrey Donaldson, the Ulster Unionist MP for Lagan Valley who lives in Moira, said: "We don't know yet, but the people of Moira will be convinced this is the work of the IRA. If that is the case, then it is the IRA's answer to Mo Mowlam."
Before Sinn Fein's expulsion, its chief negotiator, Martin McGuinness, warned that such a course of action could make it impossible for the party to return to the negotiations because of the "situation on the ground" and "conspiracies". Yesterday, he said: "Many of the actions that have taken place have been designed to embarrass the IRA and force the IRA back to work."
In a separate development, RUC officers yesterday arrested a terrorist suspect at Brereton, Staffordshire. An RUC source said Samuel Black Carroll, 45, was being questioned over a murder " at least 20 years ago".
n Army bomb disposal experts carried out a controlled explosion on a taxi owned by a former republican prisoner in west Belfast yesterday after a device was found under the vehicle.