Two former IRA prisoners tried to blackmail two Republican associates into giving them £150,000, threatening violence if their demands were not met, a court was told yesterday.

Nicholas Mullen, 60, and Ronald McCartney, 55, who both served long sentences for terrorist activity, allegedly accused the businessmen of “extracting” £6million to give to the Republican movement and then diverting the money for personal use.

One letter they allegedly sent said that “appropriate action” would be taken if £150,000 was not paid within a week and stated: “If you involve the police or anyone else, then Fort Knox will not be safe for either you or your extended family.”

The two men allegedly used the name Óglaigh na h'Éireann, the Gaelic term for the IRA, in phone calls and signed letters “P O'Neill”, the nom de guerre used in official IRA statements and communiques.

Mark Heywood, for the prosecution, told Southwark Crown Court: “Blackmail is a serious crime, especially if violence is threatened, but it is difficult to imagine a more concentrated kind of threat than that purporting to come from a paramilitary organisation like the IRA.”

The businessmen, who cannot be named, had driven Sinn Féin leaders to important meetings at the height of the Northern Ireland peace talks and were familiar with Republican language.

Mr McCartney, from Belfast, was jailed in 1976 for, among other crimes, conspiracy to murder police officers and conspiracy to cause explosions. Mr Mullen, from Acton, West London, was jailed in 1990 for conspiring to cause explosions. His conviction was quashed by the Court of Appeal in 1999.

Both men deny two counts of conspiracy to blackmail, as does a third defendant, Louie O'Hara, 43, from Loughton, Essex. Mr Heywood said that Mr O'Hara's brother, Declan, had been embroiled in a business dispute with the victims of the alleged blackmail. This had resulted in a series of bitter court cases. “Whatever banner or wording was used, you will have to decide whether this [dispute] underpins the case,” Mr Heywood said.

In March last year one of the businessmen allegedly received a call from a man who claimed that he was speaking on behalf of Óglaigh na h'Éireann. The call was traced to Mr McCartney's mobile phone, the court was told. Two days later the businessman received a letter signed “P O'Neill”. The letter said that “a prolonged and intensive inquiry by representatives of Óglaigh na h'Éireann” had established that the two men had “used the name of our organisation for personal gain”, adding: “The punishment for such abuse is self explanatory.”

The businessmen contacted the police, who began monitoring their phones. Nine calls were recorded, including one telling one of the businessmen that he had “better make f***ing delivery”. All three defendants were arrested in April after Mr McCartney allegedly said on the phone that he was making “the final call”.

The trial continues.

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