William Moore, a former member of the loyalist Ulster Volunteer Force, was released on licence last month after serving 21 years of his sentence, and has since been living in Belfast.
Moore, now 48, was given 14 life sentences in 1979 for his involvement in 19 murders, 11 of which he admitted.
The trial judge, Mr Justice O'Donnell said: "You pleaded guilty to 11 murders carried out in a manner so cruel and revolting as to be beyond the comprehension of any normal human being.
"I'm satisfied that, without you, many of the murders would not have been committed... I see no reason whatsoever, apart from terminal illness, why you should ever be released." The judge added that if Moore was ever released it should not be for at least 35 years.
Last summer, the Life Sentences Review Board allowed Moore to enrol on a scheme for working out of prison for restricted periods.
Under the terms of his release, he can be recalled to jail if he is deemed, once again, to be a threat to society.
Moore, a meatpacker by trade, supplied an assortment of knives and cleavers used by the gang to carry out random abductions of Catholics who were then tortured, mutilated and killed. He is alleged to have personally slit the throat of one victim, and kicked another to death.
Moore also drove a black taxi used by the gang to cruise the streets of Belfast seeking Catholics to kill. Some were intercepted merely because they were walking "in the wrong direction" towards Catholic parts of the city.
The gang also killed some Protestants by mistake, and a number of others in internecine feuds between loyalist groups.
Moore became leader of the Shankill gang, taking over from Lenny Murphy who was jailed in 1976 and shot dead in 1982 after his release. The assassination was carried out by the IRA, but it was strongly suspected that it had been set up by fellow members of the UVF who had begun to see him as a dangerous maverick.
Another member of the gang, William "Basher" Bates was freed in 1997 and killed in an attack eight months later in retaliation, it is suspected, for one of the gang's Protestant murders.
Moore, according to a former loyalist paramilitary, is "only too aware" that he could also be a target and is keen to keep a low profile.
The notoriety that the gang achieved because of the savagery of their crimes will be hard to dispel. Earlier this year, the film Resurrection Man, loosely based on the activities of the Shankill Butchers, was released amid controversy.
The Northern Ireland Office said yesterday that it could not comment on individual prisoners. However, sources pointed out that Moore was not freed under the provisions of the Good Friday agreement, but under previous rules.
His release comes at a particularly sensitive time amid concern about former terrorists returning to the streets, and just days after the release in the Irish Republic of the IRA bomber, Thomas McMahon, who murdered Lord Mountbatten.
Commenting on Moore's release, Alex Attwood, a Social Democratic and Labour Party councillor, said: "Obviously the release of people convicted of the most brutal of murders will register deeply within the nationalist community.
"However, if the procedures for the release of such people have been followed closely, if that person is no longer a risk to the community, and has paid his debt to society, he should be considered for release."
Mr Attwood's view is not shared by at least one relative of a victim killed by the gang. "Twenty one years does not seem very long considering what they did," the relative, who did not wish to be identified, said. "Obviously I am very concerned but there is little we can do about it. He [Moore] is still under 50 and has a life left, unlike those he killed."
In another development, Billy Hutchinson, a Progressive Unionist Party (PUP) member of the Northern Ireland Assembly, was due to meet the security minister, Adam Ingram, yesterday to express his concern at how the peace process was helping republicans but obstructing loyalists. He said it was time to "get the republican jackboot" off the neck of unionists.
Newt Gingrich, speaker of the US House of Representatives arrives in Ulster today to meet members of political parties from both sides of the community. He is the first senior American politician to visit the province since the signing of the Good Friday deal, and has already met representatives of the Irish government.Reuse content