Loyalist Volunteer Force (LVF) trappings were removed from one of its strongholds in the Ballysillan district of north Belfast.
Negotiators trying to end a violent feud between the LVF and rival terrorists said it was part of a strategy to wind up the group before the end of the year.
Two dates for making a formal announcement have been discussed: Remembrance Sunday next month, and the anniversary of its former leader Billy ‘King Rat’ Wright’s murder.
“Total disbandment has been on the cards since last Christmas,” a source close to the LVF said.
“But if you get one big step the hawks would immediately dive in and spoil it.
“That’s why it’s being done gingerly, with moves like the flags and murals coming down.”
Even though many will be sceptical of any declaration by an organisation steeped in murder and drugs, secret discussions involving a number of clergymen have continued.
But before it can announce its men have been stood down, a truce with the larger Ulster Volunteer Force (UVF) is still to be brokered.
The UVF has murdered four men since the latest shooting war with its sworn enemies erupted on the streets of Belfast in July.
Tensions between the two factions have festered since Wright formed the LVF after being thrown out of the UVF in 1996.
A year later - on December 27 - the loyalist chief was assassinated by republicans inside the Maze Jail.
Allegations that prison staff colluded with the killers are to be studied when a public inquiry into his murder gets underway next spring.
Mediators attempting to end the latest power-struggle among loyalists are believed to have made significant progress.
Despite UVF pledges to wipe out the splinter organisation, no one has been shot dead for two months.
During that period the LVF is understood to have discussed making a major response to the IRA’s September 26 declaration that its armed struggle was over.
The Government has also been approached about financing and setting up advice centres and post-conflict structures if its army council sells disbandment to the rank and file, sources claimed.
“An awful lot of hard and sensitive work has gone on in the background,” one advisor said.
“If it does happen you could be looking at Remembrance Sunday or the anniversary of Billy Wright’s death. Both would be significant.”
Pastor Kenny McClinton, who has worked as an LVF intermediary in the past, refused to comment.
He said: “If there was anything going on it would be much too sensitive for me to talk about.
“However, myself and other peacemakers would applaud any move towards a resolution of the conflict within loyalism and the wider community.”