The Ulster Defence Association was today given 60 days to disarm and protect £1.2m (€1.77m) earmarked for the redevelopment of their neighbourhoods.
Stormont Social Development Minister Margaret Ritchie set the deadline following recent rioting linked to the loyalist paramilitary group in two Northern Ireland towns.
The nationalist SDLP minister said she was not prepared to continue supporting a conflict transformation project without evidence of reduced criminality.
The Ulster Political Research Group (UPRG), which advises the UDA, responded by insisting it shared the same goal as Ms Ritchie but mindsets would have to be decommissioned as well.
The minister said: “I abhor paramilitarism of whatever hue. It, and the violence, intimidation and criminality which it almost invariably spawns, have no place in a peaceful modern society.”
She continued: “At the end of 60 days, I will measure the progress at that stage.
“If there is no evidence that they have engaged with the International Independent Commission for Decommissioning… if there’s no evidence of an end to criminality… I will be ending the programme.”
The UDA was criticised last month when a police officer was shot in Carrickfergus, Co Antrim, while trying to separate rival factions.
Last week officers came under attack from petrol bombs, stones and fireworks during UDA disturbances in Bangor’s Kilcooley Estate, Co Down.
Speaking afterwards, Police Service of Northern Ireland chief constable Sir Hugh Orde said: “If you want my personal opinion, I wouldn’t give them 50 pence.”
Ms Ritchie’s Northern Ireland Office predecessors originally approved the £1.2 million fund for the Conflict Transformation Initiative – a programme aimed at redeveloping working class loyalist communities and weaning them off paramilitarism and crime.
The UPRG has insisted it is not a UDA initiative and the organisation is not receiving the funding.
It is instead being administered by Farset Community Enterprises – a cross-community west Belfast organisation which promotes grassroots development.
Following the minister’s decommissioning deadline, Frankie Gallagher of the UPRG insisted nothing would be achieved through threats.
He insisted: “I am not taking this as an ultimatum, the Conflict Transformation Initiative was not achieved through ultimatums.
“We all want the same thing. I want to achieve what Margaret Ritchie wants to achieve,” he said.
He added that it was important to decommission mindsets as well as guns.
The UDA had been involved in many meetings with Canadian General John de Chastelain’s Independent International Commission for Decommissioning and Mr Gallagher warned money was urgently needed for some of the province’s most deprived areas.
Ms Ritchie said it was the “last chance saloon” for the UDA.
Northern Ireland’s direct rule policing and justice minister Paul Goggins added his voice to the demands for loyalism to deliver.
“The pace of positive change in Northern Ireland in recent years, and particularly in recent months, has been dramatic,” he said.
“Regrettably, this has not been matched with similar progress within loyalism. The scenes of violence that we witnessed recently in the Kilcooley Estate in Bangor and Castlemara Estate in Carrickfergus were disgraceful and cannot and will not be tolerated.”
Foreign Affairs Minister Dermot Ahern backed Ms Ritchie’s warning and said paramilitarism and criminality had no place in the north’s future.
“I believe that many of the leaders of the UDA and the UPRG have come to accept this reality and have shown leadership in trying to move forward and to deliver on it. But they now need to go significantly further,” he said.
Sinn Féin Assembly member Alex Maskey accused Ms Ritchie of avoiding making a decision.
“This is not the decisive leadership that is required. It is public posturing,” the South Belfast MLA said, adding it was a fundamental mistake to link money for deprived loyalist communities to the behaviour of the UDA.
Ulster Unionist leader Reg Empey said most within the UDA were dedicated to peace but added more needed to be done.
“Recent actions combined with a lack of decommissioning means the UDA have a job of work to do to convince the public that they are transforming and that this public money is money well spent,” he said.
SDLP deputy leader Alasdair McDonnell said the minister had taken a brave decision.
Alliance Party leader David Ford said: “I believe that she is asking the UDA to do something that they should already have done.”