The bomb, roughly the same size as one that dissident Republicans used to kill 29 people in Omagh 1998, was discovered underneath a motorway bridge south of Newry after two warning calls on Friday.
Police in Northern Ireland defused a 500-pound van bomb near the main Dublin-Belfast road on Saturday, a device which they say may have been built by dissident Republicans to cause "huge devastation" in a nearby town.
The bomb, roughly the same size as one that dissident Republicans used to kill 29 people in Omagh 1998, was discovered underneath a motorway bridge south of Newry after two warning calls on Friday. The incident comes a week after suspected dissidents carried out their first killing of a policeman in two years.
"Had it exploded it would have caused huge devastation or loss of life," Chief Superintendent Alasdair Robinson told journalists. The "sophisticated" bomb contained 500 pounds (225 kilogrammes) of explosives, he said.
There has been a surge in activity in recent weeks, by a rag-tag of Republican groups opposed to the 1998 peace agreement which largely ended three decades of violence that killed more than 3,600 people.
There was no immediate claim of responsibility for the bomb, but police said a phone call to warn about the bomb used a code word previously used by dissident Republicans.
Robinson said it may have been abandoned en route to its ultimate target due to a larger than normal police presence in the area.
The bomb was packed into a wheelie bin in the back of a Ford Transit van which had been stolen in Maynooth in the Irish Republic in January, Robinson said.
The device was one of the biggest made by dissidents in recent years and dwarfed the 300 pound (136 kilogramme) device which exploded outside Newry courthouse last year causing extensive damage.
Army bomb disposal experts carried out a number of controlled explosions during an 18 hour operation before a police spokesperson said the device had been made safe.
The operation caused extensive traffic disruption and forced the closure of the main north-south railway line nearby.
"We could have had another example of mass murder on our hands today," said Jonathan Bell, a member of the Democratic Unionist Party who sits on the Northern Irish policing board.
A week ago 25-year-old Constable Ronan Kerr was killed when a booby-trap a bomb exploded under his car in Omagh, an attack police suspect was organised by dissident Republicans to scare Catholics from joining the north's police force.
Detectives said they had detained a 33-year-old near Omagh on Friday night in the third arrest connected with the murder. On Friday police were granted an extra five days to question the first two suspects.
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