The Bishopsgate Bomb: Terrorists shrug off Warrington backlash: The IRA has returned to strike again at the economic strength of the nation, say Terry Kirby and David McKittrick

EVER since the IRA welcomed John Major's election victory last April with the Baltic Exchange bomb, which killed three people and injured 91, the terrorists have striven for a repeat performance. On at least four occasions they were thwarted; yesterday they achieved their aim with, in their terms, spectacular success.

Speculation has been rife for some months that the IRA would attempt to stage a repeat of the Baltic Exchange bomb, which the organisation regards as one of its greatest recent successes.

Republican sources in Northern Ireland have made no secret of the fact that they were both amazed and delighted at the extent of the Baltic Exchange damage and, more particularly, by the extraordinary bill for repairs from that blast.

They were also clearly pleased with the dispute between the Government and insurance companies over insuring for losses caused by terrorism, regarding the dispute as a major victory.

The idea of placing large bombs in the City of London, where so many buildings contain such sophisticated equipment in a tightly-packed area, appears to have come late and largely by accident to the terrorists. Their current campaign in Britain has been going on since 1988, but it was four years before they hit on the idea of bombing the City.

The scale of the Baltic Exchange damage reopened a new avenue for the IRA - the possibility of inflicting telling damage on the entire British economy. In the 1970s the IRA held the theory that its bombing campaign was hurting the exchequer, but this idea was little heard for the better part of a decade as it seemed the Government could absorb without great difficulty the various costs of combating IRA violence.

The Baltic Exchange bomb, however, served to reawaken IRA ambitions to hit the country's finances. The organisation will be hoping that such bombings will force British politicians to put its demands on the political agenda.

The Bishopsgate bomb was another clear demonstration of the IRA's ability to catch the police and security agencies wrong-footed, but it is also evidence that following the public relations disaster of the Warrington deaths five weeks ago, the IRA has not been deterred.

What will be particularly galling for the police and security forces is that the IRA was able to seize its opportunity when the protective rings thrown around the City of London since last autumn were clearly not at full strength. The lesson is that the guard cannot be allowed to drop.

The Baltic Exchange bomb and the one at Staples Corner on 10 April last year marked a new phase in the IRA's mainland campaign: Semtex was put aside in favour of huge bombs made from fertiliser chemicals, strategically placed in lorries or vans and carrying enormous destructive effect. A common tactic in Ulster, they had never been deployed previously in England.

Encouraged by what it saw as a success, the IRA planned an equally devastating repeat in August by planting five lorry bombs at strategic sites in the capital. The anti-terrorist branch was tipped off but a surveillance operation went wrong; the bombs were found, but the bombers escaped.

In November, a spot check on a lorry in Stoke Newington, north-east London, revealed an estimated 2,000lb of fertiliser explosives - possibly targeted at the Lord Mayor's Show.

Less than 48 hours later, security guards disturbed terrorists who had parked a van with 1,000lb of explosives outside Canary Wharf in Docklands; the detonator had worked but failed to ignite the explosives.

The IRA said in a statement that 'sheer ill luck' had prevented the explosions. Two weeks later a van containing fertiliser explosive was parked close to the junction of Tottenham Court Road and Oxford Street, packed with Christmas shoppers. Police got there just in time.

The response of the security forces to this raising of the stakes was equally dramatic: a series of high-profile road-blocks by armed police around central London, particularly on the approaches to the City.

At the same time, all medium-size lorries and vans around the capital faced regular spot checks, particularly any that had changed hands or looked scruffy. The deterrent appeared to work and the IRA returned to small Semtex bombs often placed in high street litter bins.

Outside Harrods in January and at Camden Town in February, deaths were averted only by luck; a month later a similar bomb at Warrington, Cheshire, ended in the deaths of two young boys.

Simultaneously, another IRA tactic emerged which security sources say is now causing concern not only to the police but to the managers of many industrial depots.

In the first attack on Warrington, incendiary devices were ignited at a gasworks and narrowly failed to explode a number of high-pressure gas tanks. On Friday, two devices were discovered at an oil terminal in North Shields, Tyne and Wear.

These factors, together with a number of arrests, may have led the police to relax their protection of central London. Certainly, senior Scotland Yard officers felt that they had the situation contained for the time being.

This weekend the prospects for the police and security services appear grim: they know the backlash of Warrington has not stopped the IRA; there are hundreds of industrial depots, difficult to protect, which must now be classified as potential targets and there is no sign yet that the new role of MI5 as lead intelligence gathering agency has had any effect. And the lorry bombs are back with a vengeance.

Most worrying of all, the Bishopsgate bomb demonstrates - despite arrests and convictions in the courts - the IRA's capacity for the constant renewal of its campaign of terrorism.

(Photographs omitted)

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