British government funding for loyalist communities will be withdrawn if the Ulster Defence Association (UDA) does not decommission weapons in 60 days.
The North's SDLP Social development minister Margaret Ritchie linked the move to recent UDA violence in Counties Antrim and Down and said she was not prepared to continue supporting a conflict transformation project without evidence of reduced criminality.
About stg£1.2 million is being given to the conflict transformation initiative, which aims to encourage redevelopment in working class loyalist communities.
The initiative was the brainchild of the Ulster Political Research Group, which provides political analysis to the UDA.
But it is being administered by the Farset group, which manages projects on both sides of the community divide.
Ms Ritchie 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."
The loyalist grouping 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."
In a statement this afternoon, Minister for Foreign Affairs Dermot Ahern said he strongly endorsed Ms Ritchie's "robust statement that paramilitary violence and criminality has no place in a Northern Ireland that is fast moving beyond conflict".
"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.
"The recent violence in Carrickfergus and Bangor - including the attacks on police officers - was totally unacceptable. As a result, the UDA and UPRG must act quickly and decisively in restoring community and government confidence in the Conflict Transformation process."
Sinn Fein Assembly member Alex Maskey, however, accused Ms Ritchie of ducking a decision. He said two months ago she said she was going to stop the funding but now she had given the UDA another two months. "This is not the decisive leadership that is required. It is public posturing." He said it was a fundamental mistake to link money for deprived loyalist communities to the behaviour of the UDA. "Where there is poverty, social exclusion and weak community infrastructure, government obviously has a responsibility to act. "However, funding must be based on objective need and be properly accounted for. Money for such areas is one thing but money for the UDA is another," Mr AMskey said.
PA