Nationalist politicians have expressed concern following the dissolution of the Ulster Democratic Party, the UDA's political wing.
There are fears that the North's largest paramilitary group could be planning to further intensify its campaign of violence against Catholics. It is understood the decision to disband the UDP was taken after a meeting of senior UDA commanders on Monday.
Moderates within the party, such as its leader, Mr Gary McMichael, and its press officer, Mr David Adams, had become increasingly sidelined.
The prominence of the party's hardline chairman, Mr John White - a close associate of jailed UDA leader Johnny Adair - has grown over the past year. Mr White yesterday said the UDA had lost respect for the UDP.
The UDA withdrew its support for the Belfast Agreement earlier this year. This made it very difficult for UDP figures who continued to back it, Mr White said. The UDP said it was dissolving "without rancour or ill-will".
In a statement, the party said: "During the past months intensive discussions have taken place within the UDP regarding the future electoral and representative viability of the party.
"These discussions are now at an end and it has been decided that, from this date, the UDP should be dissolved and therefore cease to exist as a political party. Former colleagues within the UDP having reached this decision without rancour or ill-will". The statement said the former party leadership would make no further media comment. Mr White admitted there had been divisions over political direction within the UDA/UDP. "There has been a real conflict and many people were wondering where the party was going. The UDP had lost the influence it once had." He claimed the British government had marginalised the party. "We have been given the impression that we are no longer required. The UDA has come to believe that we have no political impact and are unable to express their viewpoints in the political arena." The UDA's ruling body is reported to be appointing a group to deal with relevant political issues.
Sinn FΘin MP, Mr Martin McGuinness, said he was worried about the situation. He urged the UDA and republicans who oppose the Belfast Agreement to reconsider their actions. "They are not going to succeed. The road which we are travelling, the road of the Good Friday agreement and the road of the peace process is not one which are going to be easily shifted off," he said.
SDLP Assembly member, Mr John Dallat, expressed sadness at the UDP's demise: "This is a real tragedy for the North and for loyalism which needs a sense of direction and strong and inspired leadership now more than ever. Loyalism must come back to politics. The road which the pipe bombers continue upon will ultimately take us nowhere."