Dessie O'Hare has been transferred back to the maximum-security prison at Portlaoise following what the Prison Service has described as a breach of trust.
The so-called 'Border Fox' is serving a 40-year sentence for the kidnapping of Dublin dentist Mr John O'Grady in 1988.
He was caught with a mobile phone and a bag of pills hidden in his clothing.
He had just returned to the open prison section at Castlerea from Temporary release and the items were discovered when he was searched.
O'Hare was being released for short periods in preparation for his eventual release under the terms of the Good Friday agreement.
His release on licence has now been jeopardised.
A spokesman for the Prison Service confirmed this evening that O'Hare's security profile had been changed and that he had been moved out of the Grove Section of Castlerea - where prisoners live in houses rather than cells - to Portlaoise.