Security forces were on full alert last night after the UVF leader in mid-Ulster was shot dead at his Derryletiffe Road home on the outskirts of Portadown, Co Armagh.
The shooting happened shortly after 7 p.m. and is believed to be linked to a loyalist feud involving the UVF and LVF.
The victim, named locally as Mr Richard Jameson (46), a roofing contractor, was married with three teenage children. He had been at his home when he was shot in the head a number of times.
An ambulance was summoned, but Mr Jameson was pronounced dead on arrival at nearby Craigavon Area Hospital.
The shooting has all the hallmarks of an inter-loyalist feud, although the RUC last night refused to speculate which organisation carried out the attack.
However, a loyalist source in Portadown said he believed the killing to be a direct response to a UVF attack on LVF supporters. On December 27th, 12 people were injured, two seriously, in an attack on the Portadown Football Social Club. The attack is understood to have been carried out by a group from the UVF on a number of men, some of whom were LVF prisoners released on Christmas parole.
Since the attack tensions had risen between the rival paramilitaries to such a degree that speculation was rife as to which senior loyalist would be targeted in retaliation for the UVF attack.
The shooting was condemned by local politicians, including the North's First Minister, Mr David Trimble, in whose Upper Bann constituency the murder occurred.
Mr Trimble said he was shocked by the news of the killing and said it was what the people of the North thought they had left behind.
Mr David Ervine MLA, of the Progressive Unionist Party, the political wing of the UVF, said he was disgusted and shattered by the killing.
He claimed: "A disparate group, masquerading as loyalists giving cloud cover to the nefarious trade of drug-dealing, was responsible."
Suspicion for Mr Jameson's murder will centre on dissident LVF elements in the Portadown area. The organisation's most seasoned members are known to be based in the area although the LVF has been on ceasefire since May 1998.
The Jameson family business interests include roofing and tiling in Portadown and some property concerns.
The Jameson family - the dead man had three brothers, David, Bobby and Stewart - have strong loyalist links.
Mr David Jameson, the eldest brother, was seriously injured some years ago when an IRA bomb exploded underneath his car at his home in the town. He survived but sustained very serious leg injuries.
He, with his brother, Bobby, are directors of Portadown Football Club. Mr Bobby Jameson is vice-chairman of the club and a member of the ruling council of the Irish Football Association.
Last night Portadown was reported to be "very tense" as news of the killing spread through the loyalist areas.