The unit, led by a man known as "King Rat", has been linked with the death of Michael McGoldrick, a part-time taxi-driver and student found shot dead near Lurgan, Co Armagh on 7 July. The murder, at the beginning of the Drumcree siege, fuelled nationalist anger at the Orange Order and Unionists during the following week of rioting. At the time, loyalist paramilitary groups denied responsibility, although a number of men in Portadown with links to the UVF were arrested by the Royal Ulster Constabulary. They were later released without charge.
Last night there were growing fears about how the disbanded UVF unit would react to the decision of the leadership.
There were fears that it could strike out on its own and unilaterally attempt to break the loyalist ceasefire; some observers even said that the UVF leadership had taken its decision because it feared an imminent outrage by the Portadown group and wanted to distance itself from it in advance to avoid an outbreak of tit-for-tat sectarian violence within the Province.
One security source said: "The people we are talking about here in Portadown are not necessarily rational people and there is always the chance they will go off at the deep end and react badly to this decision. It may prove hard in reality for the UVF leadership to enforce this ban."
Earlier this week, the PUP and UVF hierarchy were reassured when the Stormont talks adjourned without agreeing on early discussions on decommissioning terrorist weapons, a move which the loyalists claim would hamper them against the threat of the IRA.
t John Bruton, the Irish Prime Minister, appealed to Londonderry's nationalist community to recognise the traditional importance of next week's Protestant Apprentice Boys' parade through the city. He said he understood the talks about a route for the 10 August march were going "comparatively well".
"The siege of Derry has an important significance in the mind of the Unionist community and represents an expression of their distinctive identity in Ireland. It is very important that that should be recognised," Mr Bruton said.