IRA faces cash crisis if it rejects declaration

THE Provisional IRA faces financial hardship if it decides to reject the Anglo-Irish declaration and continue its campaign of violence.

Informed British government sources insist that the IRA is finding it more and more difficult to bring in the estimated pounds 5m a year it needs to finance the level of terrorist activity it has sustained for more than two decades.

The increase in security threatened on both sides of the border if the IRA refuses to renounce violence is certain to include an even more intensive effort to stem the flow of funds from racketeering and smuggling, and the profits of drinking and gambling clubs.

Some senior Tories in close touch with security issues argue that a comparative lack of funds for terrorist activities is a key factor behind the republicans' willingness to consider a peaceful settlement.

But even allowing for propagandist efforts to magnify the current pressures on paramilitaries, normally reliable sources are adamant that close liaison between the Royal Ulster Constabulary and the four- year-old Terrorist Finance Unit at the Northern Ireland Office is scoring increasing success in cutting off funds from both loyalist and republican paramilitaries.

A senior Northern Ireland Office official described at a recent private international conference on economic crime how the RUC had been having 'resounding success' in 'drastically curtailing' the flow of funds from registered social clubs - one key source of terrorist cash - by forcing them for the first time to produce accurate accounts.

He told the conference: 'There is nothing complicated about the financial scams. From the dozens of clubs believed to be controlled or exploited by terrorists, part of each day's bar takings was put to one side and collected by a terrorist finance controller. The remainder of the bar takings was entered in the club's financial records.'