Gardai in Monaghan have discovered one of the country's largest oil laundering operation .

The illegal plant , which was able to process 20 million litres of fuel a year, was discovered in a scrapyard in Co Monaghan, about 100 yards from the border.

The plant in Drumacon, near Castleblayney, was raided after a lengthy investigation by the Revenue Customs Service assisted by gardai from the Northern Regional Support Unit and local uniformed officers..

Customs said it had the capacity to launder about 40,000 litres at a time and would have cost the Exchequer 11 million euro a year in lost duty.

Officers seized 37,000 litres of laundered fuel, about 200 bags of bleaching agent, two tankers and a van.

Two tanks in the scrapyard could each hold about 20,000 litres of green diesel which was bleached before being siphoned off into oil tankers.

Three skips full of toxic waste were also discovered and ancillary equipment used in the illegal operation was dismantled and seized.

A local man in his 40s has been arrested and was being held at Castleblaney Garda Station.