A prominent Belfast victims campaigner has implored the Northern Ireland Secretary not to lift the ban on the Red Hand Commando (RHC).
Raymond McCord alleged the fringe loyalist grouping represented gangsters who should disband.
Associates of the RHC have said its application to the government for legalisation was made in good faith.
Mr McCord's son Raymond McCord Jnr, 22, was a former RAF radar operator who was beaten to death by the Ulster Volunteer Force (UVF) in north Belfast in 1997.
He claimed: "These are gangsters, disband, disband.
"They are not a community organisation, they represent no one except themselves, they are still involved in crime."
The RHC was associated with the UVF during the conflict.
The UVF was blamed for around 500 murders and was one of the most deadly and feared terror groups in Northern Ireland during violence stretching from the late 1960s until the formal end of its armed campaign in 2007.
In its submission to the government the RHC repeated its 1994 ceasefire apology and said it hoped the measure could lay out a road map for the transformation of loyalist groups in general.
PUP leader Billy Hutchinson said it was a positive step in the right direction which might help change society.
Mr McCord said he did not believe loyalist assurances and had written to James Brokenshire to implore him not to lift the ban.
He added: "There is no need for them, the unionist people don't want them, so disband."
Mr McCord has been a trenchant critic of the paramilitaries since at least the death of his son, whose body was found dumped in a quarry.
The killing was at the centre of a critical 2007 report by the Police Ombudsman for Northern Ireland which found evidence that rogue police officers colluded with the gang.
Mr McCord has called for an independent probe into the actions of the RUC's Special Branch.