Billy Wright, 36, a former Ulster Volunteer Force prisoner, said that he intended to defy the "directive" from all three major loyalist paramilitary organisations to leave Northern Ireland by midnight on Saturday.
A statement from the "Combined Loyalist Military Command" on Wednesday warned him that failure to leave would result in "summary justice". But Mr Wright responded: "I suppose if they don't move, their words are empty, but I think they will find it very hard to justify to the Unionist people, and even their own members, for what this is - a form of fascism."
His refusal to leave means that the issue has turned into a major test of the authority of the UVF, the Ulster Defence Association and Red Hand Commandos. It could also develop into a test of the state of extreme Protestant opinion, as the paramilitary leaderships favour maintaining their ceasefire while Mr Wright favours ending it.
The affair reached into the political arena yesterday when the two main Unionist parties, David Trimble's Ulster Unionists and the Reverend Ian Paisley's Democratic Unionists, opened a campaign to have the two smaller loyalist parties excluded from the multi-party talks due to resume in Belfast next month.
The smaller parties, the Progressive Unionists and the Ulster Democratic party, have close links with the UVF and UDA and are regarded by many as the political wings of the two paramilitary groups. The mainstream unionist complaint is that the two parties should not be allowed to remain at the table while their parent organisations are issuing public death threats.
The PUP's spokesman, David Ervine, made clear in a series of interviews that he did not approve of the "directive" to Mr Wright, but he resisted pressure to issue an outright condemnation of the move. Saying he was "not in the business of the politics of condemnation", he added: "The word 'condemnation', if you want me to use it, I won't use it. I simply won't use it for one reason because it doesn't work, it hasn't saved a single life in Northern Ireland."
Peter Robinson, the DUP's deputy leader, wrote to the Northern Ireland Secretary, Sir Patrick Mayhew, urging him to suspend the PUP and UDP from the talks process. "Somebody who goes around threatening to kill people if they don't get out of the country is hardly behaving as one is expected to within a democracy," he said.
John Taylor, the Ulster Unionist's deputy leader, said the PUP had to condemn the threat to Mr Wright. "When the UVF and other paramilitaries are threatening murder of a loyalist, we are asking the PUP to condemn it," he said. "If the PUP do not, they would leave themselves in the same position as Sinn Fein."