Students at Whiterock College of Further Education in west Belfast could have been killed, Superintendent Harry Cully of the Royal Ulster Constabulary said.
Police found 2lbs of Semtex, an improvised grenade, a bomb, an AK47 rifle and a .38 revolver in the roof space of a boiler room directly below the classroom.
The cache also included about 1,500 bullets, bomb detonators, a pressure plate for a booby trap, command wire and a timer power unit.
The college is used by 3,000 students, and according to police about 25 children under five used the college creche facilities during classroom hours.
Supt Cully added: 'The terrorists had a total disregard for everybody's safety. We could easily have had a major incident on our hands.'
Gunmen shot a man in his 50s in a north Belfast street, police said.
The victim, believed to be a Catholic, was standing with several other men in Old Park Road on Saturday night when the gunmen opened fire from a passing car. He is not thought to be seriously injured.
About 500 people attended the funeral in Portadown, Co Armagh yesterday of Francie Brown, 38, a Catholic father of five killed in a bomb attack by the Protestant Ulster Volunteer Force.