The Irish Independent newspaper and the state broadcaster RTE said that the Irish police special branch have set up an investigation into the allegations which emerged last month.

The ex-RUC officer is said to have told the Gardai that the British security forces helped the loyalist Ulster Volunteer Force with the planning of a car bombing campaign in Dublin and Monaghan in May 1974.

A police spokesman said officers from the Special Detective Unit in Dublin were examining "all aspects" of the information given to them.

Claims said to come from an ex-RUC officer

Reports of the development followed indications from Irish Prime Minister Bertie Ahern two days ago that a public hearing into the circumstances of the bombings may be held.

Officers have already interviewed people outside Ireland and are expected to be sent to Northern Ireland to ask the RUC to interview other potential witnesses.

The group campaigning for relatives of those killed said it was pleased to see movement on the case "at long last", but insisted that any breakthrough in the ciminal investigation must not offset demands for a full public inquiry.

Don Mullen, of the Justice for the Forgotten group, said: "While the families are pleased to see some movement, there is also a sense that it is new material that we gave to the Gards Irish police officers.

"It doesn't detract from demands for a tribunal of inquiry because there are many serious questions to be answered about how various administrations and the Gards handled the case up to now."

Allegations of collusion

UVF paramilitaries admitted responsibility for the bombings long after the attack but allegations of collusion by RUC and British military intelligence have persisted over the years.

The source of the latest allegations is said to be a former RUC constable.

The Gardai inquiry comes after an Irish Sunday newspaper carried an article in which an ex-RUC man alleged that the Dublin and Monaghan attacks had been carried out by the UVF in collusion with members of the RUC, the British Army and the Ulster Defence Regiment.

Earlier this week Mr Ahern became the first sitting Irish prime minister to meet relatives of those killed in the attacks.

Afterwards the Justice for the Forgotten group disclosed that Mr Ahern had suggested that they set up a small working committee to liase with his own department to explore ways forward.

The Victims' Commissioner in the Irish Republic, John Wilson - a former deputy prime minister - is preparing a report into how the Dublin and Monaghan victims needs can be met.