The Police Ombudsman's office is to investigate claims that the RUC's Special Branch allowed the IRA to carry out a mortar bombing, in which a member of the RUC died, to protect an informer.
RUC Constable Colleen McMurray died when an IRA unit fired a mortar bomb into the passenger side of a police car on Merchants Quay in Newry 12 years ago.
It's understood that Nuala O'Loan's office, which has launched an investigation, will examine the claim that an undercover agent, known as Kevin Fulton, had informed Special Branch that a named IRA man had obtained a mark 12 mortar bomb, and was adapting a car for an attack.
It's claimed that Fulton told police the bombmaker's identitiy five days before the attack, and how he intended to use the flashgun device to fire the mortar.
However, Fulton was unable to tell his handlers when or where it was to be used.
Mrs O'Loan's office will investigate why Special Branch failed to arrest the named bomb maker, and failed to intercept the device.