The RUC believes it has smashed the outlawed Orange Volunteer Force, the High Court in Belfast heard yesterday.
However a prosecution lawyer warned: "This is not to say the organisation cannot re-group."
Before the court was Mr Alan Lynn (30), of Central Park, Antrim, who was applying for bail on charges of possessing hand grenades and three guns with intent to endanger life and having documents which could be useful to terrorists.
The prosecution lawyer said police intercepted a unit in possession of a loaded automatic rifle on October 28th.
"As a result of this action a series of searches were conducted in a number of areas.
"On November 3rd, Lynn's home was searched and certain documents were discovered. During interviews he admitted being a member of the OVF.
"He also admitted taking part in an organised show of strength in November 1998, when a journalist was taken to a secret location to meet armed and masked terrorists."
A lawyer for Mr Lynn said he had made a complete break with the OVF. Mr Justice Coghlin granted bail.