Both British and Irish sources privately blamed a splinter group of the IRA, the Continuity Army Council, for the bomb in Moira, Co Down, which left 11 people injured hours after Sinn Fein was suspended from the peace talks because of two IRA killings.
Security forces also pointed to the likely involvement of the breakaway group in the blast, though they had not ruled out the involvement of the IRA.
If the IRA is found to have been behind the planting of the 500lb bomb it would quickly lead to the permanent expulsion of Sinn Fein from the peace process.
This would change the inclusive character of the talks, leaving the republican party outside the process and thus, almost by definition, opposed to any new political settlement which might emerge from them. This would clearly be a major turning-point in the process, with the fear of a return to full-scale IRA violence both in Northern Ireland and mainland Britain.
Significantly, Downing Street was careful not to condemn the decision by the Irish premier, Bertie Ahern, to meet Gerry Adams this week while he is suspended from the talks. Mr Blair has not ruled out seeing Mr Adams himself.
Meanwhile, Sinn Fein's chief negotiator, Martin McGuinness, said the party might not rejoin talks, adding: "We may not go back... because the talks have lost credibility in recent weeks."
Ken Maginnis, defence and home affairs spokesman for the Ulster Unionists, argued that even if the Moira blast was blamed officially on a splinter group, "the Continuity Army Council does not have the capacity to explode bombs without active co-operation from the Provisionals".
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