A SENIOR UDA figure, who is also a member of the organisation's "Inner Council", issued the threat against people involved in last month's seizure of a Protestant family's farm, according to senior security sources.
The Garda and RUC are treating the threat seriously as the Derry UDA has been responsible for particularly serious violence, including the shooting dead of seven customers at the Rising Sun Bar in Greysteel, Co Derry, in 1993.
The security forces on both sides of the Border are uncertain how or if the UDA will follow up its threat.
The fact that the threat came from a senior member of the paramilitary group might also pose further questions about the loyalist political representatives in the Stormont talks.
Men involved in the seizure of An Grianan, the 3,000 acre farm, and its subsequent sale to Donegal Creameries have been told about the inclusion of their names on a list supplied by the UDA to a British newspaper at the weekend.
The list is known to include the receiver, Mr Tom Grace; his associate, Mr Michael Long; the directors of two security firms which helped in the seizure of assets on behalf of National Irish Bank; and the managing director of Donegal Creameries, Mr John Keon.
Loyalist sources in the north west were quoted yesterday as saying the UDA has addresses and car registrations of as many as 40 people who, it claims, were involved in the eviction of the Graham family last month and the seizure of the farm, after failure to meet loan repayments.
The farm was subsequently bought by Donegal Creameries in Letterkenny for £3.7 million from National Irish Bank.
There have been several calls toe shops in Donegal since last Friday warning that Donegal Creameries milk had been contaminated with insecticide.
No trace of poison has been found, however. There were also no codes with the warnings.
Contacts to remove the threat have been taking place. It was confirmed yesterday that a former Ulster Democratic Party councillor, Mr Ken Kerr, from Derry, has been approached to negotiate a removal of the threat.
Mr Kerr said he had been approached to act as a mediator between Donegal Creameries and the loyalist paramilitaries, and would consider doing so if certain conditions were met by the Presbyterian Church, the Irish Farmers Association and the Graham family.
In its statement, the Presbyterian Church said the threat was "utterly unacceptable and damaging to the good community relations which we all enjoy in Donegal".
The church said: "We unreserved condemn the use of these threats to life and to business and call upon those who have made them to withdraw them and to begin seeking to build good community relations rather than cause confusion, division and sectarian strife.
The Rev Peter Fleming, minister of Ballylennon and St Johnston Presbyterian congregations, where the farm is situated, and the Rev Brian Brown, minister of Ballindrait and Raphoe, said they were unaware of any attempt to drive Protestants out of Donegal.
The Donegal executive of the IFA unanimously deplored the threats and supported the decision by Donegal Creameries to buy the land quickly from the receiver.
This was in the best interests all its suppliers and, in particular, its smaller milk quota holders.
The IFA said there was a trade union of farmers of different religious denominations working together for their common good in Donegal. There was no place for threats.