Secret military intelligence files on almost 400 republican suspects that fell into the hands of dissident loyalists came from the British Army's central headquarters in Northern Ireland.
The files - which included names, addresses, car registrations, photographs and maps of the homes belonging to republicans - were downloaded from a computer inside Thiepval barracks, the Army's HQ in Ulster.
The Observer has learnt that the investigation into the leak to the Orange Volunteers centres on civilian workers at the base who are related to known loyalist dissidents.
Last night the Army refused to discuss the origin of the files which were found during an RUC operation against the anti-ceasefire Orange Volunteers/Red Hand Defenders movement. The documents were found hidden inside Stoneyford Orange Hall in Co Antrim during a police raid last month.
'We don't have any information like that, this is the police's call and rightly so,' a military spokesman said. 'It is quite right that the RUC should take charge of this investigation in order that everything is open and above board, that there is no accusation of the Army investigating itself.'
An RUC spokesman declined to comment.
Loyalist sources told The Observer that the sister-in-law of one leading dissident loyalist terrorist works at Thiepval. Her home was raided during the RUC's drive against the anti-ceasefire terror groups last month, although she was not arrested or charged with any terrorist offence. The documents on the republicans, they say, were downloaded on to computer discs and then printed out at other locations outside the barracks.
The loyalists claim the files belong to the regular British Army and would not be available to soldiers from the locally recruited Royal Irish Regiment (RIR). At least two of the leaders of the Orange Volunteers were serving in the RIR up to two years ago, prompting speculation that the files came from rogue soldiers in the regiment.
However, one loyalist source said: 'The kind of stuff in those files, the photos, the maps, the names of girlfriends of suspects, is not the type of material an ordinary RIR soldier gets to see.'
The files are only two years old and contain detailed intelligence on republican suspects from the Greater Belfast area to South Armagh. The RIR does not patrol South Armagh - an IRA stronghold - and has limited access to intelligence material collated by British troops and the RUC in the region.
Sinn Fein Assembly member for Newry and Armagh, Conor Murphy, said republicans also believed the files came from a central source and belonged to the regular British Army. 'The people on these documents were always convinced they came from the British Army and not the RIR.'
Murphy said a support group had been formed in the area, comprising more than 100 people from South Armagh who had been told they were on the intelligence lists, along with their solicitors and representatives of human rights organisations. It is campaigning for more information about the stolen files.
The revelation that the documents found at Stoneyford Orange Hall originated in Thiepval barracks is a major embarrassment for the Army as it marks a second serious security breach at the base in three years. In October 1996, the IRA penetrated Thiepval and left a car bomb in the base, which killed a soldier. It is believed the Provisionals used the identity card of a former British soldier who joined the IRA to forge passes into the base.
This latest controversy has heightened republican fears that elements of British Army intelligence are 'running' dissident loyalist agents - a view paradoxically shared by mainstream pro-ceasefire loyalists. The RUC has been at odds with the military over the latter's dabbling in undercover intelligence.
It is understood senior RUC officers are concerned that several leading loyalists are working for military intelligence. In the 1970s Army intelligence 'ran' the loyalist extremist John McKeague, the nominal head of the Red Hand Commando terror group who was used to spy on fellow loyalists. When McKeague was shot dead by the INLA in 1982, one of his handlers was reported to have said that there were 'no tears shed in Lisburn [Army HQ]' over his demise.
It has also emerged that Clifford Peeples, the Protestant fundamentalist pastor facing terrorist charges following last month's arrests of suspected loyalist dissidents, had security clearance at RAF Aldergrove.
•A 34-year-old man appeared at a special court yesterday charged with the murder of a Portadown grandmother killed in a pipe bomb attack.
Phillip Joseph Blaney, of Shimna Walk in Lurgan, County Armagh, was charged with murdering Elizabeth O'Neil at her home on June 5 this year. O'Neil, 59, died after an explosion at her home on the loyalist Corcrain estate. She was a Protestant married to a Catholic.
