The arrest of Johnny Adair will only serve to intensify the feud between paramilitaries, senior loyalist politicians predicted last night.
Mr John White, the chairman of the UFF and the UDA-aligned Ulster Democratic Party, said Mr Adair was a victim of media hype. "He still maintains he has done nothing wrong," he said.
Mr White said the arrest would "certainly contribute to inflame the situation. You already have a very angry leadership within the UFF, and now they will see that one of their key personnel at one time has been victimised and brought back to the Maze. It will make things worse." Mr Billy Hutchinson MLA of the Progressive Unionist Party, the UVF's political wing, said he now feared the feud would escalate.
"I hope Johnny Adair was arrested on the evidence that he broke the law, rather than because anti-agreement unionists called for it. But I think the feud will now intensify and I'd expect attacks against our party and the UVF."
Ulster Unionist MP Mr Ken Maginnis said Adair's arrest should signal the start of a crackdown against organised crime linked to paramilitaries in the North.
"The resolution of the current violence and lawlessness must not be seen merely in terms of the arrest of Johnny Adair," he said.
"It is time we had an Elliott Ness-type approach to illegal drinking dens, drug trafficking, the exploitation of young girls for prostitution - all areas being controlled by elements of paramilitary organisations."
Mr Maginnis called for "courage and common sense from everyone from the Northern Ireland Office down, to those who have responsibility on the streets". "The majority of decent people must not continue to be intimidated and besmirched by lowlife elements," he said.
Sinn Fein chairperson, Mr Mitchell McLaughlin MLA, said Adair's arrest did not mean the end of the loyalist feud and warned nationalists to remain vigilant.
"What nationalists want to hear is the leaderships of the various loyalist organisations to publicly reaffirm their support for the Good Friday agreement and, in particular, for the leadership of the UFF to remove the threat to kill Catholics in north and west Belfast."
The Conservative Party's Northern spokesman, Mr Andrew MacKay, said he hoped that Mr Mandelson's decision would act as a stark warning to others and said he very much welcomed it.
"Ever since he was blatantly in breach of his licence, at the time of Drumcree when there was TV footage of him associating with hooded paramilitaries firing guns, I have been calling upon Mr Mandelson to fulfil his duty as Secretary of State under the Sentencing Act to revoke his licence.
"Let this be a lesson to other early release prisoners that they must not become involved in any form of terrorism and that the rule of law must be paramount in the United Kingdom. "I hope the Secretary of State will be looking at other cases in light of the television evidence, particularly after the disgraceful events this week in Belfast," he said.
Senior Liberal Democrat Mr Menzies Campbell said: "The rules are clear. If there is a breach of the conditions of release, a prisoner will be recalled. Peter Mandelson could hardly have done anything else."