Progressive Unionist Party leader Mr David Ervine has claimed loyalists involved in a bloody feud are working for intelligence agencies in Northern Ireland.
Police in the North are questioning one man about fresh violence between the Loyalist Volunteer Force (LVF) and the Ulster Volunteer Force (UVF) that has left one man dead.
Mr Ervine accused the intelligence services of helping to recruit new members of the splinter LVF.
Mr Ervine, whose party has links with the rival UVF, which was blamed for last week's murder of leading LVF member Brian Stewart, claimed the motive was to create havoc within loyalism.
"The existence of the LVF, the behaviour of the LVF, calls into question at the very best the security tactics of the intelligence services in Northern Ireland," he said. "These people are allowed to operate for the sole purpose of disruption within loyalism."
But his claims were rejected by an LVF source, who claimed that members of the UVF have long acted as security force agents. The source said: "David Ervine is accusing police of recruiting the LVF to work for them. The UVF have been involved in 29 murders of Protestants and there has not been one person charged with any of them.
"Before the LVF was formed, who were these people working for? The UVF no longer respects David Ervine's political opinion and analysis and he is trying to get back in their good books."
Mr Ervine and other members of the PUP have been informed their lives are under threat following the murder of Mr Stewart, who was gunned down as he arrived for work in east Belfast.
PA