The Ulster Defence Association has stood down its east Belfast "brigadier" and placed operations in the area under control of its inner council.
The decision to remove Jim Gray (43), and other senior members was announced in a statement shortly after he failed to appear at a UDA leadership meeting yesterday morning.
His removal is being seen as an attempt by the UDA to present a more disciplined face in the context of ongoing criminality and to underscore a commitment to the ceasefire called in 2002 and renewed last year.
The decision to move against a significant section of the organisation in an area where it is in a position of some strength could give impetus to those within the UDA keen to move away from paramilitary and criminal activity and adopt a more political stance.
Yesterday's UDA statement said: "As from 12.30pm March 30th, 2005, the Ulster Defence Association has stood down the current leadership of the East Belfast UDA until further notice.
"To dispel any confusion, the east Belfast UDA are now under the direct command of the inner council."
Mr Gray, who was shot in the face during a fierce loyalist feud in September 2002, was one of six so-called brigadiers who ran the largest paramilitary organisation in Northern Ireland.
He survived the murder attempt as he was visiting the family of another murdered UDA figure Stephen Warnock whose killing sparked the feud. The UDA was more firmly involved in the political process during the negotiations leading to the signing of the Belfast Agreement in 1998. However, the Ulster Democratic Party, headed by Gary McMichael, did not win any seats in the Stormont Assembly in the 1998 elections and the party was disbanded in 2001.
Following the withdrawal of support for the Belfast Agreement and the ending of the UDP, the UDA later made fresh attempts to move away from paramilitary and criminal activity and to pursue politics.
Mr Gray was linked to loyalist Milltown Cemetery murderer Michael Stone and former lower Shankill UDA leader Johnny Adair, now exiled in Bolton.
He is well known in his locality for his deep tan, bleached hair and heavy jewellery.