The operation was discovered at a storage depot in industrial premises close to Lurgan.

Pumping and storage equipment were also found at the plant on the shores of Lough Neagh.

This should serve as a warning to those organised criminals who are not only defrauding the Exchequer but driving legitimate businesses to the wall by their actions Jane Kennedy

It comes less than two days after the detection of a major fuel laundering plant in County Tyrone.

The police and Customs Officers said the revenue loss to the taxpayer was about �15,000.

On Wednesday, police and customs officers uncovered an illegal fuel laundering operation at Carrickmore in County Tyrone.

It had a capacity to launder 85,000 litres of fuel a month.

Paramilitaries

The laundering operation, which could have cost the taxpayer up to �500,000 a year, was discovered in a barn erected above several underground storage tanks.

The current price of fuel in the Republic of Ireland is lower than that in Northern Ireland - with excise duty on petrol 20p per litre cheaper on petrol and 25p per litre on diesel.

Large amounts of illegal fuel are smuggled across the border into Northern Ireland.

Cheap diesel puts honest filling stations out of business, robs the taxpayer of money for public services and puts the motorist's vehicle at risk Customs spokesman

Paramilitaries are involved in many of the illegal laundering operations.

Security Minister Jane Kennedy said there would be "no hiding place" for those involved in illicit fuel laundering.

"This should serve as a warning to those organised criminals who are not only defrauding the Exchequer but driving legitimate businesses to the wall by their actions," said Mrs Kennedy, who is also chair of the Organised Crime Task Force.

"These successes are another tribute to the dedication and professionalism of Customs and police officers."

A Customs and Excise spokesman said the operations had stopped a substantial amount of harmful diesel from entering the fuel market.

"Motorists need to be aware of the full costs of buying cheap diesel. It puts honest filling stations out of business, robs the taxpayer of money for public services and puts the motorist's vehicle at risk of serious engine damage," he said.