The hardline Orange Order faction, the Spirit of Drumcree group, claims the British government is considering a moratorium on all parades in Northern Ireland during the summer.
The group's spokesman, Mr Joel Patton, said government sources told him a temporary ban on loyalist and republican marches was under discussion.
He said the Northern Secretary, Dr Mo Mowlam, was considering such a move and had referred the idea to the Prime Minister, Mr Blair. "There is a feeling in government circles that a moratorium on all parades would be the best option in the new, post-referendum climate." "The government seems to think this would be a way of ensuring there was no conflict during the summer. This would be a much worse development than anything we have been anticipating.
"It would be a crazy decision, utter madness. The Protestant people are more determined than ever to hold their traditional Drumcree parade this year. I can foresee no acquiescence," he said.
When asked about a possible moratorium on parades, a Northern Ireland Office spokeswoman said Dr Mowlam had consistently said the Parades Commission would take decisions on marches.
A senior member of the Co Armagh Grand Orange Lodge said it had information that the decision to ban the Drumcree parade had already been taken. He expressed grave dissatisfaction with Mr David Trimble and said the lodge would be writing to him telling him he was not welcome at Drumcree.