A diesel laundering operation was discovered when Revenue officials, backed up by gardaí and officials from the Department of Agriculture raided a farm in Ballybay.

It was hidden in a shed behind bales of straw.  It is understood three men fled the farm when gardai and customs arrived.

It had the capacity to launder approximately four million litres of fuel per year which could have cost the Exchequer up to €1.8m a year in lost revenue.

Revenue officials also seized 36,000 litres of fuel, bleaching earth to 'wash' the colour from agricultural diesel, two tankers and one grain lorry which had a concealed tank inside for distributing the laundered fuel around the country.

Approximately 5,000 litres of toxic waste was also found at the site. This is the highly acidic sludge left after the dye is removed from agricultural diesel.

It is the eighth significant fuel-laundering discovery made this year - four of which were in Monaghan.

The raids have prevented 55 million litres of laundered fuel making their way on to the market this year.

Meanwhile, officials from Louth County Council are dealing with this morning's discovery of 6,000 litres of similar waste found dumped at the side of the road near Faughart, just outside Dundalk.

Six containers were found there this morning, with waste was found to be leaking from some of the containers.

This is the 21st find in Co Louth relating to illegal diesel laundering.