Northern Ireland's senior police officer believes the IRA still exists, Ulster Unionist leader Mike Nesbitt has claimed.
Mr Nesbitt said Sinn Fein's credibility was "in tatters" following the shooting dead of Kevin McGuigan in east Belfast.
He met Police Service of Northern Ireland (PSNI) chief constable George Hamilton today.
Mr Nesbitt said: "The Chief Constable repeated the police assessment that members of the IRA took part in Wednesday's murder and that the IRA still exists, although what form it takes in 2015 is not fully clear.
"What is clear is that Sinn Fein's credibility on this issue is in tatters."
Last night, the Sinn Féin leadership was scrambling to limit the political damage, as police in Northern Ireland said they feared the Provisional IRA may still able to activate its military structures and order executions at will.
The worrying claims from senior PSNI officers have the potential to collapse the peace process and will put huge pressure on Sinn Féin leader Gerry Adams - who continues to insist the terrorist organisation has disbanded.
Fianna Fáil described as "absolutely chilling" the suggestion by PSNI Detective Superintendent Kevin Geddes that former IRA member Kevin McGuigan may have been shot in Belfast by a reactivated republican terror cell.
McGuigan's murder has sparked a political crisis in the North with Democrat Unionist Party (DUP) leader Peter Robinson raising the prospect of Sinn Féin being expelled from the power sharing executive if the murder is linked to the IRA.
His comments were followed by claims from Northern Ireland Justice Minister David Ford that the PSNI told him the IRA may still be active.
But last night, Mr Adams insisted the IRA was not involved in the Killing and said the McGuigan murder had been "cynically seized on" by groups seeking to "undermine Sinn Féin's mandate".
The extremely damaging claims come as Sinn Féin is seeking to recover politically from claims it covered up child sex abuse.
Meanwhile, Garda Commission Nóirín O'Sullivan was coming under pressure over her claim that the force has no intelligence to suggest the Provisional IRA was still operating its military structures.
Last night, a Garda spokesman insisted the commissioner had nothing to add to her previous comments on PIRA activity.
However, senior sources told the Irish Independent gardaí "always knew" former terrorists were also involved in criminality.
"There is a blurred line between who is involved in the criminal side and who was involved in the terrorist side," a source said.
Gardaí are reluctant to speak publicly on potential IRA terrorist activities, due to political sensitivities.
But senior officers said there was no doubt that former high ranking figures in the Provisional IRA mainstream movement were still in a position to exert influence in their local regions.
They said this was particularly evident in the border region - but they also wielded considerable power in some urban areas on the island.
Officers said the PSNI had taken an unusual step in publicly placing members of the Provisional IRA on their suspect list for the shooting of McGuigan.
And they suggested that the decision to go public must have been based on what the PSNI regarded as solid information emerging from their inquiries, given the potential fall-out from the move. But they would not comment on what intelligence was available to the Garda force on whether Provisional command structures might be in place here.
They pointed out that some former Provisional terrorists had since defected to dissident groups while others had become involved full-time in "ordinary" criminality.
Foreign Affairs Minister Charlie Flanagan is understood to be monitoring the matter closely and liaising with his counterparts in the UK and Northern Ireland.
Justice Minister France Fitzgerald said the murder of Mr McGuigan should be condemned by "all right-thinking people".
But she said speculation around those involved in the killing would be "unhelpful" to the ongoing investigation.
Fianna Fáil justice spokesman Niall Collins said it was "critically important" that Sinn Féin step back and allow the PSNI to investigate the murder.
So far, 10 people have been arrested in connection with the killing, including Shankill bomber Sean Kelly, who was later released unconditionally.
Another six men and a woman detained for questioning have also been released without charge.
The Police Federation for Northern Ireland, the body that represents officers, warned that the PSNI's official assessment of IRA activities was a cause of "great concern".
"It is a very worrying development if a command structure can be activated at will. Our members view developments with great and justifiable concern," said Federation chairman Mark Lindsay.
The PSNI said the murder may be part of a "joint enterprise" between the IRA and the Action Against Drugs group.
The incendiary disclosure by the Police Service of Northern Ireland that they believe the IRA had an organisational role in the murder of former Provo Kevin McGuigan is potentially embarrassing for the Garda Commissioner Nóirín O'Sullivan.