A £1m property portfolio in Manchester linked to Thomas “Slab” Murphy, the IRA’s chief of staff, is being investigated by the Criminal Assets Bureau (CAB) in Dublin.

Police suspect that an even bigger empire of up to 200 properties across Britain may have been bought by Murphy’s representatives since 2002. Although his name appears on none of the deeds, officers believe the south Armagh farmer was behind the purchases of the homes, which are all mortgaged and earn rental income.

The CAB is an Irish government body charged with depriving criminals of their ill-gotten gains and assets.

Murphy made a fortune smuggling oil, cattle, cigarettes and grain over the Irish border. He became notorious after The Sunday Times revealed his involvement in IRA bombing campaigns in Britain. Murphy sued for libel, but lost the case in 1998 after an 11-year battle.

Murphy still owes The Sunday Times £600,000 in legal costs arising from the case and this newspaper’s attempts to recover those costs helped prompt the current inquiry.

With authorities increasingly blocking Murphy’s oil smuggling business, Irish police believe the IRA chief has been channelling his cash into property and has built up a big portfolio in three years.

Senior sources at the CAB say a large number of houses are being examined because they were bought by two Irishmen who seem to have moved to Britain to act on Murphy’s behalf. The bureau is also investigating a solicitor they believe acted for him. “Slab’s name does not appear on the documents for these homes but we believe that it is his racket and have launched a large investigation into it,” said a CAB source.

Murphy has been the IRA chief of staff since 1997. From his farm at Hackballscross, which straddles the border, he is estimated to have built up a fortune of €60m (£41m) from years of smuggling and crime.

He has been linked to the murder of 18 British soldiers in a bomb attack at Warrenpoint in 1979. His farm was used as a base for other notorious attacks, including the 1996 Docklands bomb. He was involved in negotiations with Libyan agents for arms shipments, which have now been destroyed as part of the decommissioning process.

He is one of a number of terrorists under investigation by the CAB. An IRA commander in Dublin has been served with a €700,000 (£478,000) tax bill. He was a docker who stole consignments of goods coming into Dublin port for years.

The investigation of IRA finances is being hampered by the group’s habit of using cash, however. So far, no illegal assets or accounts have been discovered, and no funds from illegal activities have been tracked straight into the IRA’s purse.

Investigators believe that the IRA has a cash operation bigger than the mafia’s. It operated for years completely outside legal institutions, with its own bankers and accountants. Volunteers were paid in cash and members involved in illegal activities were expected to pay a large percentage of their earnings back into the organisation.

“They are probably the best-run criminal organisation in the world,” a senior CAB source said. “The mafia aren’t a patch on them. They leave no paper trail behind them at all (because they) work solely in cash.”

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