One of the biggest diesel laundering operations to be discovered in Ireland in recent times has been found near Castleblayney, Co Monaghan.

Customs officers backed up by gardaí raided the rural location just after 6am.

It is believed the operation could have cost the Exchequer €11m a year in loss of taxes.

Customs officers, backed up by armed gardaí, raided the premises just metres from the border.

There they found 37,000 litres of laundered diesel as well as tankers, vans and equipment the criminal gang used to remove the dye from agricultural diesel.

The ‘washed’ fuel is then sold on as road diesel making millions for those involved in the operation, but destroying the engines of unsuspecting motorists.

Around 20m litres of fuel could be laundered in Ireland a year.

It appears the toxic waste produced by those involved was pumped out into a nearby field and from there into local streams and domestic water supplies.

One man in his 40s was arrested this morning and is being questioned in Castleblayney garda station.