The Ulster Defence Association's threat to break its ceasefire appeared to cause as much bafflement and concern in the UDA itself as it did in the broader political, paramilitary and security arenas.

"I don't understand what is going on," one very senior loyalist figure with UDA clout told The Irish Times yesterday.

And then he contradicted himself. "This is all about ego," he added.

His double-take reflected the internal confusion and tension in the UDA. His analysis was that this threat relates to the cult of personality. He said it was about a UDA figurehead in the loyalist Shankill area who went on a "solo run" from the broad UDA leadership.

This Shankill figure, who was freed from prison under the early-release scheme of the Belfast Agreement, already has a serious reputation within loyalism. But according to informed sources he was now developing as a powerful and independent maverick.

There are parallels here with dissident republicans such as Dessie O'Hare and Dominic McGlinchey.

"I think he sees himself in the mould of Billy Wright . . . and he may go the way of Billy Wright," said one observer, referring to the Loyalist Volunteer Force leader who was murdered by the INLA in the Maze in 1997, and who has been given cult status within the more extreme elements of loyalism, particularly in mid-Ulster.

The senior loyalist source quoted earlier said the paramilitary leader responsible for yesterday's statement controlled the Shankill area and had allegiance in north Belfast as well.

But UDA commanders in other areas of Belfast, and in Antrim and Derry, were unaware of the statement. "He took this decision alone, and it is very serious for the overall leadership of the UDA if he can tell everyone that the UDA ceasefire is over," said the source.

If the UDA starts shooting nationalists, as it is threatening, it could force the Northern Secretary, Mr Peter Mandelson, to halt the early releases of the remaining 17 UDA inmates in the Maze. One of these is Michael Stone, who murdered three people during the funeral of the Gibraltar Three in Belfast in 1988, and whose power base is in east Belfast.

He is also a powerful and influential figure. "Can you imagine what the UDA in east Belfast would do or say if Michael Stone has to spend another 10 years inside because of this?" asked the loyalist contact.

There was a general consensus last night that the justification for the threat did not stand up to serious scrutiny.

The second battalion west Belfast brigade of the Ulster Freedom Fighters (UFF), a cover name for the UDA, accused nationalists of seeking to "ethnically cleanse" Protestants from so-called peace line areas of north and west Belfast.

"From 12 o'clock tonight 20th June 2000 the UFF reserves the right to shoot any person seen to be attacking Protestant homes. This will be in direct contradiction to our ceasefire, which we have steadfastly adhered to despite intense provocation, but enough is enough," it added.

But sectarian violence and tensions on both the loyalist and nationalist sides of the peace walls, as almost all politicians agree, are endemic in north and west Belfast and are particularly rampant during the summer marching season.

The Housing Executive said it had had no reports of intimidation of Protestants in these areas in the past four weeks, but that over the same period 21 cases of Catholics being threatened in north and west Belfast were reported.

And as Mr Billy Hutchinson of the Progressive Unionist Party, which is linked to the UVF, stated yesterday, there are already local structures in place to try to stem this violence and intimidation. This involves nationalist and loyalist community leaders trying to quell trouble before it worsens into more serious sectarian violence.

In the broader picture, the statement by the UDA in west Belfast could have serious implications for the rest of the summer, and possibly beyond. It could be the precursor to a turf war within loyalism.

This Shankill commander is understood to have built up a relationship with senior LVF leaders in Portadown and mid-Ulster. At the tinder-box time of Drumcree it would take little to spark off tit-for-tat paramilitary violence, even if it were on a no-claim, no-blame basis.

The Shankill figure may seek to become a rallying focus for loyalists during Drumcree, possibly operating in tandem with the LVF, the Orange Volunteers and the Red Hand Defenders.

This in turn could produce further tensions between this disparate grouping and the generally more disciplined UVF. The UVF is already in serious dispute with the LVF, and if the UDA in west Belfast was to ally itself with that organisation the resulting internecine tension could explode into a major feud.

And as many nationalist politicians said yesterday, when loyalism fragments or fights among itself the protagonists often seek to prove their combative strength by carrying out sectarian murder attacks on Catholics.

Yesterday's statement effectively set the scene for Drumcree 6 next month. Other leaders in the UDA probably would wish to curb the power of the Shankill figure, but they may have great difficulty reining him in, such is his influence in the Shankill, and his growing influence elsewhere.

The best the senior loyalist source could offer was that the UDA leadership would probably call a meeting soon, to determine if there was any way of restraining its dissident member. Pretty cold comfort at a time of hot emotional temperatures.