Norman Baxter said intelligence was not shared with bomb investigators
Another attack like the Omagh bomb could happen because a blind eye is being turned to dissident republicans, a former senior policeman has claimed.
Norman Baxter, who led the investigation into the 1998 atrocity, said the government needed to recognise the danger posed by dissidents.
Mr Baxter made his comments to an MPs' committee investigating intelligence surrounding the 1998 Omagh bombing.
He also warned them the border area of NI was again vulnerable to attack.
"We have a blind eye being turned to dissident activity and I have to say that the border is exposed again," he said.
"It would be remiss of me not to advise this committee that you could be sitting here in 10 years time discussing another atrocity because the government and the authorities have failed to acknowledge what is happening."
Mr Baxter, who is also the former head of the PSNI's Serious Crime Branch, said there was a policy of running down security in Northern Ireland which dated back to the 1990s.
He told the Northern Ireland Affairs Committee it was inspired by political thinking and he warned that, in light of the dissident threat, the government was repeating the same mistakes now.
He said the situation was like the "Emperor's New Clothes" where everyone carried on pretending everything was normal.
Referring to the Omagh bombing, he said the security policy at the time was a failure.
He told MPs that the government and the authorities "took their eye off the ball" before the Real IRA bomb attack on 15 August, which killed 29 people, including a woman pregnant with twins.
Mr Baxter said that whilst he believed the bombing could not have been prevented, opportunities to intervene in the run up to Omagh were missed.
Dissident republicans were blamed for the 1998 bomb attack in Omagh
He also said intelligence was not made available to the team who were investigating the atrocity.
"I'm not in a position to know what was or was not being conducted by the intelligence community, but if such things as telephone numbers, either on the day or in the period leading up to Omagh, were available within the intelligence community that should have been shared with investigators at a very early stage," he said.
"It is my view that those numbers, or any information, on this gang which was in existence should have been shared with investigators."
Mr Baxter said there had been a string of earlier threats involving the same republican gang which were responsible for carrying out the attack.
"The investigators didn't have access to the intelligence, not to prevent those incidents, but to ensure that the investigators after those incidents would have had an opportunity to have the suspects arrested prior to the Omagh bomb," he said.
The former detective superintendent said the Real IRA team came from Northern Ireland and the Republic of Ireland.
"These bombers had free reign from the middle of 1997 and the authorities, whoever they were, allowed that to continue," he said.
He said there were earlier bombs in Markethill, Moira, Portadown, Armagh, Lisburn and Banbridge where the bombers could have been intercepted.
"At each one of those terrorist incidents there was a point of intervention which could have disrupted this terror gang," he added.
"There could have been opportunities to arrest this gang after Lisburn, after bombs in May (1998), July and even after Banbridge.
"Omagh can't be seen as an individual incident, Omagh was the last in a series of incidents dating into the middle of the 1990s, the middle of 1997, and so there was a long lead-in to the Omagh explosion."
Lady Sylvia Hermon, who sits on the committee, said Mr Baxter had made some serious allegations.
"That seems a very serious criticism of the PSNI and the former chief constable Sir Hugh Orde, who has consistently warned of the threat from dissidents," she said.
At the 2007 trial of Sean Hoey, the only man to be charged with the Omagh bombing, the judge criticised the police handling of the investigation headed by Mr Baxter.
He said evidence gathering had been completely disorganised and also questioned the validity of statements given by two police officers at the trial.
The two police officers were later cleared of any criminal conduct by the Police Ombudsman.