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The decision by Stormont, the government in Northern Ireland, to implement the new measures was made in the wake of escalating violence and increased bombings in the province and the threat to Northern Ireland's economy.
The move has been welcomed by Unionist MPs but has been fiercely condemned by Republicans.
More than 300 suspects have already been detained in a series of dawn raids today.
The decision to bring back the internment law for the first time in 10 years, under the Civil Authorities (Special Powers) Act, was made last week following consultation with British prime minister, Ted Heath, but an announcement was delayed to enable the Army to make the arrests.
In a statement made at 1115 BST today, Mr Faulkner said Northern Ireland was "quite simply at war with the terrorist."
He said: "The terrorists' campaign continues at an unacceptable level and I have had to conclude that the ordinary law cannot deal comprehensively or quickly enough with such ruthless violence.
"I have therefore decided... to exercise where necessary the powers of detention and internment vested in me as Minister of Home Affairs."
He said the decision had been made to protect life and property and the main target would be members of the Irish Republican Army (IRA).
The act has been described as one of the most powerful anti-terrorist measures on the statute books of any Western democracy but Mr Faulkner said he could not give any guarantees it would bring an end to the campaign.
Suspects who are arrested under the new law, and who are not charged or released within 48 hours, will be taken to reception areas where they will be held indefinitely without trial.
They will have a right to appeal to an advisory council - which is yet to be set up.
The British Opposition has called for Parliament to be recalled so the issue can be debated fully.
James Callaghan, shadow home secretary, said: "Quite obviously the government must act against gunmen shooting in the main streets of Belfast, especially as the shootings are growing.
"Internment, however, is only a short-term measure. And although it worked before in temporarily removing the leadership of the IRA, it proved to be no long-term solution to the problem.
The government has made it clear it has no intention to recall Parliament.
The decision to reactivate the powers goes against the Convention for the Protection of Human Rights of the Council of Europe to which Great Britain signed up in November 1950, although a let-out clause states the measures can be used if a state of war exists.
The power of internment was reactivated during the Northern Ireland troubles of 1956-61.
During that time nearly 200 known or suspected members of the IRA were detained without trial in special internment camps for an average of two years.
The introduction of the new measures and the secret dawn raids sparked fierce gun battles and protests in Ulster which claimed the lives of 12 people, including two women.
Protestants in the Ardoyne area of Belfast, which is predominantly Catholic, fled after setting fire to their own homes to make sure they were not taken over by Catholics.
In February 1972 after more violence and deaths the British Embassy in Dublin was burnt down.
Ted Heath, the British Prime Minister, now convinced that Stormont was incapable of containing a situation rapidly going out of control, announced on 24th March that control of security and of the Royal Ulster Constabulary would be transferred to Westminster.
Mr Faulkner and his colleagues resigned and addressed an immense crowd of 100,000 in front of Parliament Buildings.
Stormont was suspended for a year, but in effect it was the end of the experiment in devolution under the 1920 Government of Ireland Act.
A Northern Ireland Assembly was elected in June 1973. The British government's aim was to restore devolved government, but with power shared by both Catholic and Protestant representatives.
This was agreed by party leaders and the Irish and British governments at Sunningdale in Berkshire in December 1973. A power-sharing executive, with Mr Faulkner as Chief Executive and Gerry Fitt as his deputy, began work at the start of 1974.
The Ulster Unionist Council, however, rejected the Sunningdale Agreement, and in the Westminster general election of 28th February 1974, 11 of the 12 MPs elected for Northern Ireland were loyalists opposed to power-sharing.
When the Assembly approved power-sharing, Protestant workers launched a highly-effective strike which paralysed the region for 15 days until Faulkner resigned. Direct rule would continue from Westminster for many years to come.
On 5 December 1975 the then Secretary of State for Northern Ireland, Merlyn Rees announced the end of internment.
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