Thompson and one of his criminal pals were spotted at Dublin Airport yesterday afternoon.
Specialist garda units such as the Organised Crime Unit as well as local detectives will now be monitoring his every move.
Thompson's return comes just a fortnight after the north Dublin crimelord known as ‘Mr Big' – who is suspected of ordering the murder of Real IRA terror chief Alan Ryan – returned to the capital after months abroad.
A source said: “This is the last thing that gardai in Dublin need right now. Whenever Freddie is around there is a huge increase in tensions.”
It is understood that Thompson (31) teamed up with some of his other close associates before spending the night at the Crumlin family home of long-term partner Vicki Dempsey.
Sources say Thompson, who is facing serious criminal charges in Spain, is back in Dublin for the Christmas period.
“He looked delighted with himself when he was walking through the airport with his younger associate. He seemed very happy to be back on home soil after being away for over 14 months.”
Last night, Thompson was stopped by gardai in the company of his notorious cousin and criminal associate Liam Byrne in the Crumlin area.
The duo were searched and questioned before going on their way to Thompson’s girlfriend’s house at Stannaway Road. Byrne from nearby Raleigh Square is one of Thompson’s most trusted associates.
Thompson, who is the leader of one of the warring Crumlin/Drimnagh gangs that have been involved in a bitter feud that has claimed at least 15 lives, has not been in Ireland since his high-profile extradition to Spain in October of last year.
Spanish authorities have been investigating Thompson for offences that include drugs trafficking, money laundering and unlawful assembly. These are linked to Christy Kinahan's international crime syndicate.
Sources say that it is suspected that Thompson is back in Dublin to try and recover drug debts for the Kinahan syndicate.
A source said: “Thompson is their henchmen and they are desperate for cash.
“The expectation is that he will be leaning on senior and junior drug dealers across the city for the tens of thousands of euro that are owed to the Kinahan organisation.
“Things could be getting a lot worse in the coming weeks and there is an expectation of increased violence and intimidation.”
It is understood that Thompson spent his time in Spain with many of his closest associates, including Christy Kinahan's son Daniel and other senior gang members.
The Kinahan gang were the prime targets of the international police operation codenamed Operation Shovel that resulted in up to 30 arrests and the seizure of property and cash.
Associates of 'Fat' Freddie Thompson are the prime suspects for two gang murders which happened just 12 hours apart on September 24 last
Freddie's mortal enemy Gerard Eglington (27) who was shot dead in Portarlington, Co Laois - was previously suspected of pipe bomb attacks at Thompson's south inner city family home.
While Thompson's gang turned against Declan O' Reilly (32) who was gunned down on Dublin's South Circular Road - after the tragic father who was not involved in organised crime - killed drug dealer Derek 'Doris' Glennon in Mountjoy Prison in 2007.
Glennon was a pal of the 'Fat' Freddie faction.