Such a bombing would have been without precedent if it had gone ahead, since the summit is being attended by 25 prime ministers from Europe and Asia. No gathering of world leaders has ever faced such an attack. The suggestion will mean even tighter security for the VIPs who have gathered in London.
The bomb, in a BMW car, was seized at the port of Dun Laoighaire by Irish anti-terrorist police. Its driver was queuing to take it on board a ferry to the Welsh port of Holyhead.
There was early speculation that its intended target was the Grand National at Aintree, but last night the Taoiseach, Bertie Ahern, said: "Whether it was going to Aintree, or more likely the Asem summit where I'll be attending, it is tremendous that it's been thwarted."
Both the British and Irish governments regard the device as intended to disrupt the Northern Ireland talks which are due to reach a conclusion next Thursday. Both were adamant yesterday that they would not be deflected by any such attacks.
Irish security sources yesterday blamed the bomb on an as yet unnamed breakaway republican group which has access to IRA technology. The group is believed to be responsible for a number of incidents, including two mortar attacks on security bases in Northern Ireland.
The new republican grouping is thought to be headed by dissident IRA members who resigned from the mainstream organisation in November last in opposition to Sinn Fein's peace process strategy.
The group was at first not taken seriously by some sources, but in recent times it has come to be regarded as a major threat. Its intention of attacking a target in England, possibly the summit meeting, evidently means it is even more ambitious than had been thought.
The multi-party talks process is meanwhile expected to enter its final phase today when the chairman, former US senator George Mitchell, presents a draft agreement to the parties. The plan is for him to hear their responses to it and, over the weekend, prepare a more settled document for presentation on Monday.
Although Mr Mitchell is to be the author of the plan, he is drawing it up with input from all the parties involved and in particular from the British and Irish governments. Intensive negotiations are scheduled in the run-up to Thursday's deadline.
Mr Ahern has toughened his public line in recent days, last night saying he would be making no further compromises and calling on the Ulster Unionist leader, David Trimble, to make moves if there was to be a deal. This followed his warning on Wednesday that he wanted a strong new north-south institution and was not interested in "an ad hoc chat show".
The Dun Laoighaire bomb was found in a white BMW queuing for a Stena Line ferry. Five people were detained by Irish police, who surrounded the car, together with a second red BMW, after surveillance. A Garda spokesman said: "In the car were 980lbs of home-made explosives. It had detonators, timing devices and boosters."
The Cabinet was briefed on the security threat although government sources refused to discuss details. The Tory spokesman on Ulster, Andrew Mackay, said it was "immensely serious - a bomb of this sophistication isn't just a minor splinter group. It has to be a mainstream terrorist organisation and undoubtedly at this crucial time in the talks there is a real risk of dangerous terrorist attacks."
Tony Blair was last night sticking to his 9 April deadline for completing the talks, in spite of the terrorist threat to try to disrupt the process.
With tensions mounting, Mr Blair last night held more crisis talks with Mr Ahern in London in an attempt to reach a compromise over the cross- border bodies and repair the damage from their failure to reach agreement in Downing Street talks 24 hours earlier.
Mr Blair was said by Ulster Unionists to have been "furious" at the undiplomatic language used by Mr Ahern before their meeting on Wednesday.
Downing Street yesterday played down the reports of a rift between London and Dublin, insisting that they were looking for a way forward together through the differences over the cross-border bodies.
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