A British spy who infiltrated the heart of the IRA was warned that his life was in danger just days before he was shot dead, it emerged today.

Bertie Ahern, the Irish Prime Minister, told the parliament in Dublin that Gardai contacted Denis Donaldson after they became aware that he had moved to a primitive cottage near the village of Glenties, in Co Donegal.

"Garda visited him in the light of the public attention that he received and advised him because of his circumstances, there was a perceived element of threat to his life," Mr Ahern told the Dail.

"They offered advice on personal security and the telephone number of Glenties Garda station in case he had any concerns."

Mr Ahern said that gardai visited Mr Donaldson’s home again last night after receiving a 999 call from a member of the public who had noticed the door of the cottage was open. They found Mr Donaldson’s body and two spent cartridges outside the house. His right hand had been severed.

At a press conference in Glenties this afternoon, Chief Superintendent Terry McGinn told reporters that the cottage belonged to Mr Davidson's son-in-law and officers had offered Mr Donaldson "whatever protection he needed" shortly after he moved in, in January.

Ms McGinn refused to confirm reports that Mr Donaldson had been tortured, stating only that he had suffered several gunshot wounds. She said that further details were expected after the completion of a post-mortem examination.

Tony Blair and Mr Ahern pledged today that the murder would not derail the Ulster peace process. A meeting in Armagh tomorrow will take place as arranged where the two leaders will unveil the latest proposal to revive the devolved Stormont government, which was suspended in 2002 amid allegations that the IRA was operating a spying ring.

Sinn Fein and the Democratic Unionist Party (DUP), led by Sir Ian Paisley, will be given a deadline of November 24 to reach agreement on power-sharing terms for a revived Northern Ireland Assembly.

The likelihood of the various parties meeting the new deadline has, however, been thrown further into doubt by Mr Donaldson's killing.

Some sources have suggested that the murder may have been carried out by hardline dissident republicans opposed to the peace process. Republicans have pointed the finger at British military intelligence. The IRA, who publicly declared an end to all criminality in December, remain the prime suspects.

Mr Blair described the killing as "a serious, appalling, barbaric act" deliberately timed to derail the peace process.

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