The Irish Minister for Justice, Dermot Ahern, says that the Real IRA (RIRA) and Continuity IRA(CIRA) are pooling their resources together and that their "capability is growing" significantly.
“The threat here I believe on this island is as dangerous as it was at any time during the Troubles,” said Ahern.
The 250lb car bomb that exploded in Newry last Monday night demonstrated a new level of combat effectiveness from dissident republicans.
Dissident republicans have intensified their campaign of violence in recent months, and, according to sources, morale amongst them is at an all-time high.
Ahern said that there have been efforts to bring dissident republicans "closer together."
A small number of republicans that were dedicated to the peace process have joined the dissidents.
“What they are really at is to try and bring back troops on to the streets of Northern Ireland and to destabilize the efforts of political parties in the North to bring final peace,” added Ahern.
Last week’s car bomb was the first device to explode in the North since the 1998 Omagh bomb.
Over the course of the weekend, member of the Police Service Northern Ireland (PSNI) were forced to fire several plastic baton rounds at rioting Nationalists in Craigavon.
Top movies about Northern Ireland's Troubles