How to set up maven 3 local plugin repository

I need to have a completely offline maven repository due to some limitations. According to http://cwiki.apache.org/confluence/display/MAVEN/PluginResolutionException , only <pluginRepositories> are searched for plugins. So I am wondering how to configure maven to look up plugins in a local file system. I tried using "file://" prefix when setting <url> but it doesn't work.

DEBUG] Verifying availability of /home/dsun/.m2/repository/org/apache/karaf/tooling/features-maven-plugin/2.3.0/features-maven-plugin-2.3.0.jar from [central (http://repo1.maven.org/maven2, releases=true, snapshots=false, managed=false)]
[ERROR] Plugin org.apache.karaf.tooling:features-maven-plugin:2.3.0 or one of its dependencies could not be resolved: The repository system is offline but the artifact org.apache.karaf.tooling:features-maven-plugin:jar:2.3.0 is not available in the local repository. -> [Help 1]
org.apache.maven.plugin.PluginResolutionException: Plugin org.apache.karaf.tooling:features-maven-plugin:2.3.0 or one of its dependencies could not be resolved: The repository system is offline but the artifact org.apache.karaf.tooling:features-maven-plugin:jar:2.3.0 is not available in the local repository.

dsun@localhost:> ls /home/dsun/.m2/repository/org/apache/karaf/tooling/features-maven-plugin/2.3.0/features-maven-plugin-2.3.0.jar
/home/dsun/.m2/repository/org/apache/karaf/tooling/features-maven-plugin/2.3.0/features-maven-plugin-2.3.0.jar

The settings.xml

<settings>      
<offline>true</offline>
  <profiles>
  <profile>
    <id>local</id>
    <pluginRepositories>
      <pluginRepository>
      <id>central</id>
      <url>file://${env.HOME}/.m2/repository</url>
      <