Nick Hopkins, Rosie Cowan and Richard Norton-Taylor
The Guardian, Saturday 12 April 2003 01.37 BST
A former soldier who worked in the secret Force Research Unit has revealed that the squad had 60 agents in Belfast alone, and up to 30 in Derry.
The rest were spread across the districts in which there were republican strongholds, providing intelligence on PIRA activities.
The remarkable number of PIRA informers recruited by the army was regarded as a huge tactical success because it gave the military an advantage it had never had before.
A small number of the agents infiltrated the highest echelons of the terrorist group, including the most important of all, a man who was given the codename Stakeknife.
The army was prepared to protect him at all costs and FRU headquarters concentrated solely on the analysis of the information he provided.
When in 1987 Stakeknife was targeted by members of the loyalist paramilitary Ulster Freedom Fighters - who had no idea he was a double agent - the FRU guided the loyalists away from him to a man of 66, Francisco Notarantonio, who was allegedly "sacrificed" to protect the agent.
Notarantonio, an IRA member in the 1940s who had not been actively involved for many years, was shot dead as he lay in bed.
According to the FRU source, Stakeknife was responsible for a number of murders, a claim which raises potentially serious questions about the way the army was conducting operations in Northern Ireland at the time.
The behaviour of FRU has been the subject of a four-year investigation into collusion by the Metropolitan police commissioner, Sir John Stevens, who will deliver an interim report of his findings on Thursday.
His inquiry focused on the 1989 murder of the Belfast defence solicitor Pat Finucane, who was shot 14 times by members of the loyalist Ulster Defence Association, sister organisation of the UFF.
As revealed by the Guardian last June, Sir John uncovered widespread collusion between the police and loyalist paramilitaries which went unchecked for years.
Sources told the Guardian last year that while there was no evidence that killings were officially sanctioned, the relationship between some RUC Special Branch detectives, army intelligence officers and loyalist terrorists was so unprincipled and lacking in accountability that it bordered on "institutionalised collusion".
Sir John's 40-page report, which is not yet completed, is likely to say that Finucane's murder should have been prevented and that his killers could and should have been brought to justice.
It will also highlight the way in which intelligence about the targeting of Protestants was passed on quickly to the intended victims so that shootings could be prevented.
Intelligence about Catholics facing death threats was not distributed so assiduously.
Finucane's UDA killers were given his details by an army double agent, Brian Nelson, who was helping loyalists to identify leading Catholics.
Sir John discovered that two of the UDA gang members thought to be responsible for the murder were informers for the police.
One of the two guns used in the attack was stolen from an army barracks.
Some time later the weapon was recovered by police officers who, inexplicably, returned it to the army, where it was modified, destroying potentially crucial forensic evidence.
Sir John's investigation was hampered by the unprofessional methods of the Special Branch, which was responsible for handling agents recruited and run by the police.
Special Branch kept scant written records, so there was no paper trail for Sir John to follow.
He had expected to complete his report last year but last autumn he discovered hundreds of previously undisclosed documents about FRU activities, opening up new lines of inquiry.
Sir John has sent files on more than 20 former and serving police officers and soldiers to the director of public prosecutions in Northern Ireland, some of whom could face charges of conspiracy to murder, although it will be months before the decisions whether to prosecute are made.
Among the files the DPP has received is one on Brigadier Gordon Kerr, head of FRU at the time of Finucane's killing.
Brig Kerr, now military attache in Beijing, testified on Nelson's behalf at a 1992 trial unrelated to Finucane, claiming that he had saved many lives.
The Ministry of Defence's nervousness about Sir John's findings has been replaced by a more bullish attitude in recent weeks.
General Sir Mike Jackson, chief of the general staff, has made it known that if any FRU soldiers broke the law they should face the consequences in court.
This is Sir John's third investigation of alleged security force collusion with terrorists, and his detectives have interviewed 15,000 people, catalogued 4,000 exhibits, taken 5,640 statements and seized 6,000 documents in the past 14 years.
His recommendations could fundamentally change the way intelligence gathering is handled in Northern Ireland.
They will be acted upon by Hugh Orde, the chief constable of the Northern Ireland police service, who was in charge of the Stevens inquiry in his previous job as a Metropolitan police deputy assistant commissioner.
But former members of FRU doubt that the DPP will ever prosecute the men involved and are sceptical that Sir John's report will say anything about the role of Stakeknife.
Finucane's family believe his murder was a conspiracy and have no faith in the investigation, insisting that an independent public inquiry is needed.