TWO YEARS ago tomorrow, the loyalists applied the brakes to the savage murder machine that is even now being primed and polished again.

Even though the North has seen a repeated raising and dashing of hopes since then, it is difficult to credit that the elation, relief and positive excitement of that day may have been squandered.

But that, and a return to dread and death, is indeed the prospect in store if the loyalist paramilitary leaders yield to the temptation to retaliate for recent IRA attacks in Britain and in Lisburn.

On the morning of October 13th, 1994, a panel of the most senior loyalist political leaders faced the press in a community centre on the Glencairn estate, in the heart of loyalist North Belfast.

There were fine words about "a brighter future" and "the first tentative step towards a new and better Northern Ireland" before the veteran loyalist, Mr Gusty Spence, read the historic statement of the Combined Loyalist Military Command (CLMC).

That statement announced a cessation of "all operational hostilities" as from midnight. It came just 43 nerve wracking days after the IRA had announced its own "complete cessation", and it seemed not only to add the cornerstone to the developing peace process but to open real avenues for reconciliation between the two traditions.

The CLMC statement contained two unexpected and unprecedented elements. It proclaimed, in capital letters, that the union of Great Britain and Northern Ireland was safe, and it offered an expression of "abject and true remorse" to "the loved ones of all innocent victims over the past 2 years".

It urged: "Let us firmly resolve to respect our differing views of freedom, culture and aspiration and never again permit our political circumstances to degenerate into bloody warfare".

The only conditional element set out was a significant one, but it did not at the time appear to pose a major problem: "The permanence of our ceasefire will be completely dependent upon the continued cessation of all nationalist/republican violence. The sole responsibility for a return to war lies with them.

Thus the North was transported overnight from the shadow of sectarian slaughter to the bright prospect of economic resurgence and life without tension or threat.

The armed loyalist groups, who had outstripped the murder rate of the IRA in the preceding year, had been brought around slowly to their decision on a ceasefire following the IRA cessation.

They were suspicious of a "sellout", of secret concessions to the republicans, and it took much political work to convince them that the union was secure.

The endorsement of the loyalist paramilitary prisoners was the breakthrough which cleared the way for rapid progress to a definitive ceasefire just as the perceptions and attitude of the prisoners are vital in the present crisis.

But in the new found peace the fringe loyalist parties, the UDP and the PUP, began to build an important public political role and influence. Their spokesmen, over the subsequent difficult two years, developed an assurance and authority which makes them pivotal in future developments.

There is an awareness in loyalism that the political credibility so hard won could evaporate if they end their ceasefire. Their place at the Stormont political talks would be lost.

And with the transition to a more thoughtful approach to events through their persistent advocacy of dialogue they undoubtedly appreciate the catastrophic and probably uncontrollable consequences of resuming a murder campaign.

But there are strong voices in their military ranks arguing for direct and violent action. The strength of these elements in the inner circles is unknown, and the outcome of the argument between them and the more moderate public figures remains uncertain.

The pernicious erosion of confidence which has brought us to the present point was not within their control. The causes and the blame for the depressing descent into crisis again have been well rehearsed in the political bickering of recent months and will continue to be bitterly disputed - the delay in moving forward to negotiations, the protracted harping on decommissioning, the hesitation and prevarication of the UUP, and so on.

But, on the second anniversary of their now fragile ceasefire, the loyalist political leaders must find themselves examining whether there was any shortfall in their own follow up to those early phrases which seemed so visionary and reconciliatory.

One initiative which seemed possible and which might perhaps have changed the ill fated direction of subsequent events would have been for them to open a direct dialogue with Sinn Fein on some of the core constitutional and practical issues which have consistently been sidelined by the main unionist parties.

On October 13th, 1994, Mr Spence had said: "Of course the day will come when we will sit down with Sinn Fein." He added then: "Everything has to be in place. It has to be right for them, for us, for everyone.

If the worst happens in the coming days, there may be some among them who will conclude they waited too long.