A solicitor telephoned the UVF from a police station and said a man they shot should be "taken out" before he made a statement, it was alleged in court yesterday.
Manmohan Sandhu (41) was also alleged to have frustrated police murder inquiries by telling the UVF that a suspect should be "taken off-side".
The phone calls were allegedly made from a consulting room at the serious crime suite in Antrim, said crown lawyer David Hopley during an application for bail.
Indian-born Mr Sandhu, Colby Avenue, Derry, had been remanded in custody on Monday on four charges of perverting justice and one of attempted incitement to commit murder.
Mr Hopley told Lord Justice Nicholson that police set up a covert operation into allegations that Mr Sandhu was involved in serious crime while carrying out his duties as a solicitor.
He said his conversations with specific clients had been recorded following the granting of a warrant. But the transcripts were edited by an independent barrister to remove items of legal privilege.
Mr Hopley said Mr Sandhu was arrested under the terrorism act as a suspected member of the UVF.
"It's the police contention that he used his position to communicate out information regarding detained persons and others to senior UVF figures, using his mobile phone from the consultation suite."
Mr Hopley said that last July Mr Sandhu frustrated a police investigation into the murder of Jamison Lockhart by making a phone call to a third party that an individual police wanted to interview should be taken off-side.
"He rang a senior UVF figure in east Belfast and advised the man should be taken off-side as he had become aware he was a suspect in the murder of Jamison Lockhart."
Regarding the incitement to murder charge, Mr Hopley said it was alleged Mr Sandhu had phoned to the effect that Jonathan Hillier, who had been shot by the UVF, was at the Ulster Hospital.
"He has got to be taken out, he hasn't made a statement yet," Mr Sandhu was alleged to have said in the phone call.
Mr Hopley said Mr Sandhu met the legal requirements for bail but there was a risk of further offences if he was allowed back into the custody suite in Antrim.
Defence counsel Peter Irvine said Mr Sandhu had been a solicitor for 14 years and was strenuously denying all the charges.
Lord Justice Nicholson said as police were not opposing bail Mr Sandhu could be released. Personal bail was set at £5,000, with two sureties of £10,000 each.