Senior members of the unionist paramilitary UDA have made a thinly-veiled threat to return to full-scale violence following a decision by the Belfast Executive to halt funding for a UDA-linked 'peace' group'.
UDA paramilitaries told reporters that "the North could be taken to a very bad place" by the decision, which followed the UDA's refusal to decommission any of its weapons.
The UDA's most prominent leader, Jackie McDonald, has publicly ruled out decommissioning. Earlier this month, the UDA held last-minute talks with the decommissioning body in what were widely regarded as a stunt to avoid the funding being withdrawn.
It emerged last week that the British, 26-County and US governments had put pressure on Minister for Social Development Margaret Ritchie not to withdraw the funding, despite the UDA's continued involvement in crime and violence. The vast majority of both nationalists and unionists in the North remain deeply opposed to the funding.
Continuing discord within the political establishment has followed the decision, which has given the UDA hope it will be reversed.
"The decision is very unpopular within political circles and we are very well aware of that," said a senior UDA leader to the Sunday Business Post.
"We aren't under pressure, and we are confident the funding will be restated at a future date."
Speaking out on the move this week, Sinn Féin's Martin McGuinness told the Belfast Assembly he believed Ritchie was "absolutely correct" to do what she did.
McGuinness, who is currently Deputy First Minister in the northern Executive, said: "I think this is an issue that has been marked more by fiction than fact.
"Let me be absolutely clear. I - and I believe I also speak for everyone in the Executive - am totally and absolutely opposed to any funding whatsoever going to the UDA, whether they decommission their weapons or not."
Mr McGuinness added: "The funding introduced by [former British Direct Ruler] Peter Hain was irregular. It was wrong and it should never have happened."
Mr McGuinness's statement clarified his party's position on the funds, which have been a source of political intrigue for over a year.
The controversy has come as a political godsend to the smaller nationalist SDLP party and Margaret Ritchie, currently their sole Minister in the Executive, who hopes to capture a seat for the party in South Down at the next Westminster election.
On Thursday Mr McGuinness had accused the SDLP minister of "losing the run of herself" when following that day's meeting of the Executive she issued a statement which focused on a difference over minutes from a previous meeting.
The DUP's Gregory Campbell said this week he agreed with Ms Ritchie's decision but not with the route she had taken to implement it.
This effectively countered the scathing criticism of Ritchie from party colleague and Finance Minister Peter Robinson last week. Robinson accused Ritchie of acting outside the law in making her decision and running contrary to decisions which he said had been taken collectively in meetings of the Executive.