IRA financiers in cash flow squeeze: David McKittrick looks at the funding of Northern Ireland's paramilitary groups

THE IRA has come a long way since the late 1960s, when it was a small, badly-organised group based in the backstreets of Belfast. Today it is, in financial terms, a multi-million pound business.

No one is able to give a precise account of the IRA's income, expenditure and assets, and the terrorists themselves will not talk about their financial affairs. But most of the 'guesstimates' are that the organisation needs in excess of pounds 5m a year to keep its campaign going.

So far, the IRA has managed to stay ahead of the Government's efforts to stem the flow of funds, but the efforts of the authorities must by now be hurting the paramilitary cash flow.

In the early days, the IRA raised money from supporters and members in Northern Ireland, supplemented by donations from well-wishers in America, the Republic and Britain. Money also came in from clubs, pubs and taxi businesses. From such rudimentary beginnings the organisation has branched out into all sorts of enterprises. Illegal 'shebeens' serving hijacked drink gave way to large well-appointed pubs and clubs which obtained licences through proper procedures. Most were to all intents and purposes legal, though often the apparent owners were really front men who passed the profits to paramilitary groups.

The Belfast building boom of the 1980s offered rich pickings as huge sums of money were pumped into the construction industry. Tax frauds, extortion and other scams meant that millions of pounds leaked away to the paramilitaries. As the authorities caught up with one racket, the paramilitaries invented new ones. Loyalist groups have remained at a comparatively primitive stage in racketeering, concentrating on crudities such as obtaining money with menaces.

Republicans have specifically denied involvement in drugs, pornographic videos and 'Angel dust', a substance used in cattle breeding. But they appear to be heavily involved in many other enterprises, including various types of stolen goods and counterfeit material. Pirated video copies of major feature films reach Belfast before the films reach the cinemas, while fake perfume, designer jeans and other goods are widely available. Loyalist groups contain many more individuals with 'sticky fingers' than does the IRA. Security sources acknowledge republican money tends to go to 'the cause', while many loyalist leaders have been lining their own pockets.

The IRA is an expensive organisation to run. Much money goes towards the welfare of its hundreds of imprisoned members and their families, while large amounts are consumed by the efforts to buy ever more sophisticated weaponry.

The authorities set up first an RUC racketeering squad and then a much more sophisticated committee drawing on expertise from specialists such as Customs officers and accountants. The suspicion exists that large sums of IRA money may be floating around the London Stock Exchange, or further afield as the republicans plan ahead.