THE US Government has banned Sinn Fein from fundraising following White House anger over the IRA’s continuing involvement in crime.

Gerry Adams, the Sinn Fein leader, and other members of the party have been ordered not to take part in any fundraising during their traditional St Patrick’s Day visit to America this week.

In a further blow to Sinn Fein, The Times has learnt that the British Government has set a deadline of the end of this month for a plan to stop the party from benefiting from millions of pounds of foreign donations.

Underlining the diplomatic shift against Sinn Fein and the IRA, The Times has learnt that the threat level for Irish republican terrorism in the UK has been raised for the first time since the Good Friday Agreement in April 1998.

This response follows the near-terminal blow to the peace process caused by the accusation from the head of the Northern Ireland Police Service that the IRA was responsible for a £26 million bank raid and the murder of Robert McCartney in a Belfast bar. The threat level is now “substantial”, one below “severe general” which is the current status for international terrorist threats to the UK.

The ban on fundraising was delivered privately to Mr Adams through US State Department channels. Diplomatic sources said it was made clear that such activities, normally a crucial part of Sinn Fein’s links with Irish Americans, would be unacceptable.

It is the latest in a series of hostilities from President Bush, who has frozen Mr Adams out of all official engagements during his visit to Washington and kept the doors of the White House firmly closed in his face.

US Senator Edward Kennedy has also called off talks with Mr Adams, it emerged last night as Peter King, Sinn Fein’s leading backer in the US Congress, called for the IRA to disband, saying their recent actions had fuelled growing hostility within Irish-American circles.

Paul Murphy, the Secretary of State for Northern Ireland, last month extended the special exemption that allows Sinn Fein and other parties in the province to raise money in the US for another two years.

But he said that this would be the last time that he wanted to give special favours to Northern Ireland parties, demanding the results of a formal consultation with all parties concerned by the end of March, The Times has learnt.

In 2000 the British Government made it illegal for parties to raise funds outside the UK. However, Northern Ireland was exempted because both the SDLP and Sinn Fein depended on fundraising in the Republic of Ireland. They were also allowed to keep donations anonymous, because of the threat of intimidation to donors.

This allowed Sinn Fein to continue to raise funds in America, which security sources said had netted them between £15 million and £20 million since the ban on such activities had been lifted by President Clinton in March 1995.

Mr Murphy said last May that he had lost patience with the loophole and wanted it done away with by the beginning of this year.

“The Government recognise that the current funding arrangements lack transparency and that they are open to abuse,” said Mr Murphy.

But after an intense summer of negotiations on the future of the Northern Ireland peace process, he backed down.

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