Ministers are to consider a funding deal for the UDA within weeks, Northern Ireland's Social Development minister said today.
Margaret Ritchie said the armed group needed to send out the message that it had ended criminality for good and dealt with its arsenal of weapons.
Direct rule ministers announced in March they would provide a £1.2m incentive aimed at moving the paramilitary group away from crime and violence. Ms Ritchie is charged with distributing that incentive.
Minister for Social Development Margaret Ritchie
The SDLP minister said: "My message to them is quite simple. We are now in a new political dispensation, end all forms of criminality and bring forward decommissioning.
"There's no need for criminality, there's no need for arsenals."
The funding was due to run for three years in six loyalist areas and would prompt economic regeneration in run down areas.
It will be provided in three stages of £400,000 in each of the three years and the Ulster Political Research Group, which advises the UDA, has been told that the money will only continue if there is clear evidence of a reduction in violence and crime.
The UPRG has submitted a detailed business plan asking the Government to fund a Conflict Transformation Initiative, which it claims will create an organisation no longer involved in crime, and encouraging and helping its members to seek education and jobs.
The UDA has been riven with violent feuds and its leadership has changed several times in recent years. The police and the Independent Monitoring Commission has linked its members to drug dealing and other crime.
PA