Four men and two women have been arrested in connection with the murder of former UDA brigadier Jim 'Doris Day' Gray who was shot dead at his home last night.
The PSNI have also carried out searches in the Castlereagh area of east Belfast near where Mr Gray lived.
Loyalist sources are suggesting the murder was not connected to the feud among loyalist paramilitary groups but may have been carried out by rival members within the UDA.
The 47-year-old had been expelled from the UDA earlier this year and was on bail facing charges of laundering money connected to the drugs trade.
Superintendent George Hamilton, the officer in charge of the inquiry confirmed that the victim's former associates were the prime suspects.
"A significant and major line of inquiry is that Mr Gray was murdered by the UDA.
"Since Mr Gray's arrest and retention in Maghaberry Prison in April, there has been a number of threats made against him. Those threats were given to him while in prison and since his release," Supt Hamilton said.
He said police had from time to time checked whether Mr Gray was compliant with his bail terms and had been advised about personal security. However, he was not under police surveillance or the subject of dedicated police protection, he insisted.
Gray was shot several times in the upper body and died at the scene. Television pictures showed his body lying on the ground, his boots sticking out from under a blood-stained white sheet.
A senior loyalist source said he was "99 per cent sure" the killing of Mr Gray, a former UDA head in east Belfast, was unrelated to a feud between Protestant groups.
"He was either shot as an internal issue by the UDA who have tried him for treason in the past or else it was somebody who had a grudge against him," said the source, speaking on condition of anonymity.
Police have refused so far to specualte on a motive.
Mr Gray, nicknamed "Doris Day" for his striking bleached blond hair and year-round suntan, had been on bail facing charges of money laundering.
DUP deputy leader Peter Robinson has condemned the killing. "Those who take the law into their own hands have nothing to contribute to society."
The UDA was formed in 1971 and during the three decades of conflict in Northern Ireland it mounted attacks on Catholics. It is widely estimated to have killed more than 400 people.
At least four other people have been killed in the past few months as a result of rivalry between armed Protestant factions. Mr Gray had survived an assassination attempt in 2002.