Northern Secretary Peter Hain has pledged to support disadvantaged loyalist areas but warned that the British government would not allow a "mafia" paramilitary culture to predominate in these communities.
He said in Belfast yesterday that recent loyalist violence following the rerouted Orange Order Whiterock parade had, as well as wasting public money, shaken confidence in international investors who were considering setting up in the North.
As already reported here, Mr Hain confirmed that political development minister David Hanson would take on a special role of tackling social disadvantage in Protestant areas.
He said the British government would work with trustworthy loyalist representatives, but would have no dealings with paramilitaries.
"The choice for loyalist paramilitaries is clear: play the political role that you claim as your motivation, or face the rigour of the law as the mafia organisations into which you seem to have degenerated. You will not be allowed to terrorise your own communities."
Mr Hain argued that Sinn Féin only made political gains by the IRA moving away from violence.
He also challenged what he appeared to consider an untenable unionist and loyalist negative mindset.
"What has unionism got from the agreement? I don't regard that as a rhetorical question: there is an answer. For the first time in the history of Northern Ireland the Irish Republic has dropped its constitutional claim over the territory of Northern Ireland.
"For the first time in the history of Northern Ireland Sinn Féin has accepted that Northern Ireland will remain part of the United Kingdom until and unless the people of Northern Ireland decide otherwise.
"For the first time in the history of Northern Ireland the principle of consent is enshrined in an international agreement. Now, anyone who knows the history of Northern Ireland and of unionism must appreciate the great significance of this.
"To those who say that the principle of consent should always have been there, we always have to deal with what is, and not what should be: you can't rewrite history, but you can make it.
"In short, it seems to me that the two fundamental demands of unionism throughout 30 years of the Troubles have been met: peace - the end of the terrorist campaign - and the securing of the union."
Mr Hain also made clear that Northern rate-payers would have to pay more for their services, and that they must also face water charges by 2007.
DUP leader Ian Paisley said there could be no hope of political progress unless Mr Hain matched his words with deeds.
To help instil unionist confidence, Mr Hain must move on issues including "parades, victims, skills and training, the Royal Irish Regiment, the Policing Board, public appointments and the Ulster Scots culture".
Sinn Féin president Gerry Adams said, with some notable exceptions, the "political representatives for working class Protestant areas have long since abandoned them".
SDLP leader Mark Durkan said loyalist paramilitaries were "predators in their own communities".
Ulster Unionist Assembly member Fred Cobain welcomed Mr Hain's commitment to invest in loyalist areas, and said there must be a "sustained plan of delivery" to tackle deprivation.
