It's thought that gangs in the city are trying to put together an arsenal of stolen legally-held firearms. They may also be helped by the flood of cheap weapons onto the black market in Ireland and Britain.

The reported growing firepower of the hoods may also increase the prospect of a potential street war between the criminal underworld and dissident republican paramilitaries.

However, an INLA source told the 'Journal' that they were "more than a match" for armed gangs.

"In Derry, the INLA and Real IRA will have no problem in taking them on. I wouldn't be overly worried about them. We're prepared to take these people on. If people threaten republicans the INLA won't be found wanting in taking them on."

SDLP Councillor Mark H. Durkan said there was "a genuine concern" on Derry's streets.

"There should not be any guns on our streets, regardless of whose hands they are in. But the idea that drug dealers and such like are 'tooling-up' is enough to send a shiver down anyone's spine.

"The people of Derry are all too aware of the hurt and horror that guns have brought to our communities and the last thing we want to see is gun-wielding criminals roaming our streets."

Disarmed hoods

The INLA recently claimed that its members had disarmed Strabane hoods armed with a shot gun and "converted hand gun".

The source told this newspaper that illegal firearms had become "pretty easy" to get in recent years.

"In Dublin you can pick up a pistol for less than £5,000 while stolen shotguns are a dime a dozen."

The police in Derry have appealed to all legally-held gun owners to ensure their weapons are secure from theft. A spokesperson said: "Anyone who has information that could help protect the public from the activities of criminals should give it to police."

The PSNI and the gardai seized drugs and 40 guns in an operation earlier this week. As part of the same investigation Dutch police yesterday seized 165 machine guns and handguns and 7,000 rounds of ammunitions. It's thought at least some of the haul was intended for the North.