Minister for Justice Michael McDowell has said that Provisional IRA plans to create what he described as "a state within a state" were "well advanced" and needed to be targeted by joint cross-Border investigations and operations by the Garda and PSNI.
Speaking to journalists at an international policing conference in Co Monaghan, Mr McDowell said that legislation last year allowed for the Garda to co-operate closely on joint investigations.
"It is essential that these powers are used to frustrate the well-advanced project of the Provisional IRA to create a state within a state on this island."
He said: "The troubled history of this country and the consequent complex and evolving links between paramilitary groups and organised crime pose special challenges which can only be met through the highest levels of co-operation between the agencies in both parts of Ireland."
Mr McDowell's comments about a "state within a state" refer to sophisticated networks believed to have been established by the IRA to launder and process millions of euro from its criminal activities.
There is currently a major cross-Border investigation involving both the PSNI and Garda that has been targeting money laundering.
Last February the investigation led to a series of raids, arrests and seizure of in the region of £3 million in cash.
Meanwhile the head of the Criminal Assets Bureau (Cab), Chief Supt Felix McKenna, who organised the conference, said the bureau was stepping up co-operation with international police forces to catch Irish criminals who have hidden assets abroad.
Representatives from police forces in 25 different jurisdictions attended the conference at the Nurenmore Hotel, in Carrickmacross, along with representatives from Interpol.
The conference was addressed yesterday by Mr McDowell, Garda Commissioner Noel Conroy, Director of Public Prosecutions James Hamilton, and senior officers from the Cab and its Northern Ireland equivalent, the Assets Recovery Agency.
Chief Supt McKenna said it was crucial to have contacts in police forces across Europe.
"The criminals themselves have learned from our successes and they are concealing their assets in other jurisdictions."
Yesterday, Mr McDowell praised the work of the Criminal Assets Bureau as a very effective way of targeting organised criminals.
"For many years, organised crime bosses in Ireland claimed social security payments and paid little or no tax, despite evidence of lavish lifestyles," Mr McDowell said.
"The bureau has successfully pursued these criminals for payment of taxes and has ruled on their eligibility for social welfare payments." Between 1996 and 2003, the Cab obtained interim and final restraint orders to the value of €73 million.