[Page 20] The decision to form this neo-nazi group, in which the numbers (like C88) stand for letters: 1 = A(dolf), 8 = H(itler), was taken after events at a meeting in Kensington (London) in May 1991, when the fascist League of St George meeting was turned over by opponents.  The precise origins of C18 aren't the main point at issue here,  but Searchlight's account and role is highly relevant.
Hepple's autobiography put it this way: "I was witness to the early events in the life of C18 and I reported them back to Searchlight. My and other information led the Searchlight team to set in motion a thorough investigation into every aspect of C18."  What were the fruits of this 'investigation'? These were divulged for the first time in the April 1993 issue of Searchlight,  with C18 described as Nazi gangsters, and as "instigator, the American Nazi Harold Covington" (p. 3). The magazine went on to say "what has become clear in charting the development of this terror group is that for the first time since the mid-1960's British nazis have been able to put together an organisation, albeit inspired from abroad, which is able to gather intelligence, analyse it... and send out thugs and arsonists to act on it" (p. 7, my emphasis). In their written evidence to the Parliamentary Home Affairs Select Committee, submitted in May 1993, Searchlight continued this theme of Covington being the key, adding a flourish that the "South African state security services" were possibly involved too, though no real evidence was given (p. 3). In December 1993, verbal evidence to the committee by Gable called for MI5 (no less!) to 'take the lead' in the fight against C18. According to close Searchlight associate, journalist Ken Hyder, Gable said "a shift to MI5 would make sense because... Combat 18 had links with Northern Irish terrorists like the outlawed Ulster Defence Association."  This was followed up by a keynote editorial in the January 1994 issue of Searchlight (p. 2), which had a clarion "call for the investigation of nazi terror groups either to be put in the hands of a special police unit... or to be turned over to MI5 or MI6." This subtle difference of emphasis, in which MI5 were only one of the agencies named can be accounted for by the slightly different audience, Searchlight after all, with considerable success, present their magazine in [Page 21] some circles as quite 'radical' even a touch 'anti-Establishment'. The cost of running such a blatant errand for MI5 as they did before the Home Affairs Select Committee meant the tension between their dual roles of sometimes pretending to be part of the Left and in reality being creatures of the state had been exposed. Some indication they were aware of this was shown by the subsequent admission that "this proposal might astonish some of our readers" (p. 2). It would not have been a shock to readers of my work, for as recently as November I had published a calculated guess that Searchlight's written evidence to the Committee (not yet seen) was consistent with "an MI5 sponsored agenda" and would "regale the Select Committee with the latest briefing from Ms Rimington" (then Director General of MI5).  At War With The Truth was published at a very embarrassing time indeed for the team and their sponsors, and its distribution to all Committee members will not have helped much (despite Sir Ivan Lawrence's efforts). The final report of the Committee took specific issue with Searchlight's criticism of Special Branch/the police generally, and call for MI5 to exclusively take over monitoring the far right. They urged "the police, Special Branch and the Security Service to continue to monitor extreme right wing groups." 
The argument about C18 from Searchlight up to this time was quite clear, almost consistent. It was portrayed as a group of Nazi thugs, acting autonomously, who had nonetheless been inspired by US Nazi Covington (definitely) and South African Intelligence (perhaps). Their activities were worrying because of links with Ulster Loyalists. Special Branch, with whom Searchlight worked closely in the 1970's when the key inter-agency rivalry was MI5 versus MI6, had by now entered into a 'turf war' themselves with MI5. This reached something of a crescendo with the April 1992 achievement by MI5 of wresting primacy in Loyalist and Republican 'terrorist' matters from Special Branch. In this situation, twilight operators like Searchlight were faced with something of a choice to make as to which side to back in this new inter-agency conflict. Gable and his team unambiguously chose MI5, hence his attack on London Special Branch (the largest and most powerful) who had allegedly "failed to comprehend the dangerous nature of groups like C18 here and abroad."