The blast at the Arndale centre on Saturday injured more than 200 people when it exploded as police were clearing the area after a series of coded warnings.
In its statement the IRA blamed the British Government for squandering the opportunity for peace after the ceasefire and said peace was still possible if the Government put the "democratic rights" of the Irish people ahead of its "political self interest".
The IRA statement, which was issued in Dublin, said it called a complete cessation of military operations in August 1994 to enhance the democratic process. "We are still prepared to enhance the democratic peace process. We appreciate the efforts of those who have made a genuine contribution, but if there is to be a lasting peace, if the conflict is to be resolved in Britain and Ireland, then the British Government must put the democratic rights of all the people of Ireland before its own party political self- interest."
The statement added: "We sincerely regret injuries to civilians which occurred."
It emerged last night that a security crackdown, that would be one step away from internment of IRA terrorists, is being considered by ministers. According to senior Conservative sources last night the moves were intended to prevent the planning of any further attacks such as the Manchester blast.
The Government has decided to strengthen its focus on security following the rejection of the peace process by the IRA. Ministers have asked the security forces to use existing anti-terrorism laws to harass known IRA members. John Major and his Irish counterpart, John Bruton, agreed on a joint approach to Sinn Fein in their first talks since Saturday's events, which took place on the telephone and lasted 20 minutes.
Dublin has told London that it would not support the re-introduction of internment, and British ministers believe it would be counter-productive. But ministerial sources said the Royal Ulster Constabulary, which is mounting more checks in Northern Ireland, has been told to intensify its action against the IRA.
Ministers are keen to see known IRA members arrested under the Prevention of Terrorism Act, which allows suspects to be detained for up to seven days without charge. There could also be more IRA suspects arrested and charged under the Emergency Provisions Act - enabling the security forces to hold alleged terrorists in custody until their trial.
Irish ministers are also likely to be asked to step up cross-border co- operation on security and hot pursuit across the border, with an increase in helicopter operations.
In Belfast yesterday political talks continued at a snail's pace, with the parties and the British and Irish governments trawling through procedural issues at Stormont. Dr John Alderdice, leader of the middle-of-the-road Alliance Party, said: "Don't expect early results from this, this is going to be a difficult, slow process."
Meanwhile, police hunting the Manchester bombers yesterday issued descriptions of the two suspected terrorists who parked the van packed with explosives in the city centre on Saturday morning. They also issued an electronically generated image of the man who bought the van in Peterborough the previous day for pounds 2,000.
The man who handed the cash envelope over was described as between 35 and 40, 5ft 8in tall, with a heavy, overweight, build. He had a round, clean-shaven face and light brown hair.
The men in the van on Saturday were the driver, believed to be a white male, aged 20-30, with a slim build and about 5ft 10in tall, and another man described as white, aged 30-40, and of medium build and taller.
Analysis, page 16