An IRA "property portfolio" worth some £30m in domestic and business properties, including hundreds of apartments, is under investigation by the Assets Recovery Agency.
The agency said that £9m in equity was involved, but stressed that it was an investigation against assets, not individuals or companies.
The IRA operation is said to be under the control of the IRA's reputed chief of staff, Thomas "Slab" Murphy, a quiet South Armagh farmer who is regarded as the organisation's financial mastermind.
The agency, which has the task of recovering the proceeds of crime and terrorism, visited the home and business premises of the Manchester businessman Dermot Craven, who lives in a gated mansion worth £2m. Its officers seized large numbers of documents after successfully applying to the High Court for search and seizure warrants. Both in England and in Belfast the agency has in recent years confiscated property and other assets running into millions of pounds.
Yesterday's large-scale operation poses substantial difficulties in the Irish peace process, which had appeared to enter a relatively quiet period after the IRA's action last month in decommissioning all its weapons.
The hope of the authorities in London and Dublin is that some time next year the Rev Ian Paisley will, in the wake of the decommissioning, agree to enter government with Sinn Fein. Evidence of such hidden IRA wealth - and the possibility that more remains to be uncovered - will almost inevitably make him more reluctant to do so.
The arms move was hailed as a potentially historic step, particularly since the IRA had also indicated that it was winding up its activities, but an important unanswered question concerned the future of its financial empire.
The IRA was said to have invested in properties and businesses worth millions in both parts of Ireland and overseas, possibly in Bulgaria, and last year it stole £26m in a Belfast bank robbery. A branch of the Assets Recovery Agency, headed by the former assistant chief constable Alan McQuillan, has been highly active in Belfast in recent years. It has, however, focused on loyalist paramilitaries and underworld criminals such as drug dealers.
This approach has been criticised by Unionist politicians, some of whom accused the authorities of turning a blind eye to the IRA's money.
Until yesterday it was unclear whether the British and Irish authorities would pursue the IRA's assets with full vigour, or quietly relax their efforts to seize its illegal gains. Yesterday's swoops appear to signal that there will be no let-up. This was emphasised by the Irish Justice Minister, Michael McDowell, who said that the Irish authorities were cooperating in every way to seize illegal monies.
He declared: "Anyone who believes that political development will somehow airbrush out the whole question of the proceeds of criminality, and the massive portfolio of assets, should think twice now because those assets should not be written off."
Speaking in Dublin, he added: "It's not simply what happens in this island. It's people who transfer assets abroad to be outside the reach of the long arm of the law." Sinn Fein's president, Gerry Adams, who was questioned by reporters yesterday on his arrival at Downing Street to meet Tony Blair, responded: "I don't think it's any accident and I am not surprised that this is trotted out today. This is obviously a political agenda."
Mr Paisley, who was also at Downing Street, said: "It's a bit late in the day. We should have started a bit earlier on to deal with IRA racketeering. I wish the police every success."
Greater Manchester Police confirmed that they were raiding Craven Properties in Sale, which is part of the Craven Group run by Dermot Craven. A builder working near the offices said up to 30 officers in riot gear were involved.
He added: "There are always Porsches and other big motors in the car park."
Closely watched by two police forces, the quiet farmer who calmly looks after the IRA's millions
Thomas "Slab" Murphy, the IRA leader suspected of having millions of pounds invested in property in Manchester, has for most of his republican career led a charmed life.
He has never been convicted of any offence, despite the fact that for more than two decades every Northern Ireland secretary, every chief constable and every general has spent long hours pondering how to put him behind bars.
In his home area of South Armagh and further afield, everyone knows he has been highly active in IRA activities, holding positions such as chief of staff, northern commander and director of operations. He has also been the chief money man. He was therefore at the heart of the IRA for decades, ensuring it had the money to maintain a campaign which was highly expensive. According to a former senior member of the RUC Special Branch: "Money was always a wee bit of a problem - but never too much of a problem to them. They always have been very good at concealing it. We reckoned that whenever they were going very well it took five million a year to run the war."
The IRA's finance department involves a number of people, but the authorities have always regarded Slab Murphy as its linchpin, calmly controlling a budget of millions from his farmastride the border between Northern Ireland and the Republic. He thus operates in full view of two police forces, carrying out republican business even though his premises are assumed to be under intensive intelligence surveillance.
His name has been known to the wider public since the 1980s, when he stepped from the shadows to sue The Sunday Times for labelling him a senior IRA member. The newspaper won the case, exposing Mr Murphy to the full glare of recurring publicity. The defeat was an embarrassment to him, but he nonetheless went on to become IRA chief of staff in 1997, according to A Secret History of the IRA by the respected journalist Ed Moloney.
He has been continually described as a member of the IRA's ruling army council by Unionist MPs, including the former Ulster Unionist leader David Trimble, who have used parliamentary privilege to name him in the Commons.
Dublin's Justice Minister, Michael McDowell, made a similar statement in the Irish parliament earlier this year, referring to a man who had been killed near the border. He said: "He knew he was a marked man. His crime was to testify before a Dublin jury, to tell the truth and point out that Thomas 'Slab' Murphy was chief of staff of the IRA and a member of its army council."
Murphy himself is said to be a very wealthy man, owning large amounts of border land, but the assumption is that he has not grown rich by helping himself to IRA money. The belief is that he has been proficient in both financing the organisation and by separately making money for himself.
The contrast between the two paramilitary figures who have been in the news this week could not be greater. Jim Gray, the loyalist leader who has just been shot dead, was involved in drugs, with a flamboyant lifestyle and a conspicuous wardrobe which earned him the nickname of Doris Day.
Slab Murphy, by contrast, in person presents the image of an ordinary, not particularly well off farmer who spends most of his time mucking about on his farm. Mr Murphy has been crucial to the peace process, in that he has always been regarded as a republican "soldier" who concentrated on financial and military matters and was uninterested in politics. Yet it seems that, as the process developed, his thinking evolved and he was in the end persuaded to go along with the IRA's recent voluntary disarmament.
But although the IRA's violent campaign may be over, it seems that it retains its cash and property assets. The battlefield has in effect shifted: now the tussle between the authorities and Slab Murphy is a financial rather than a military one.
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