The Castlereagh Councillor said: “This money should be spent on improving schools, public transport and libraries in areas that have been worst affected by loyalist violence.
“In nearly all cases, the places worst affected by the ravages of loyalist violence and criminality are loyalist areas themselves.
“Loyalist paramilitaries have no regard for their country and are hell-bent on destroying the economy in their locality.
“I am sure that many people in loyalist communities will be very suspicious about the provision of this funding.
“In future, funding to help loyalist areas should benefit those who need it most – the people whose lives have been ruined by intimidation, extortion and violence. Better public services and more job prospects for everyone in loyalist areas should be the objective of the government.
“It appears that the government’s solution to terrorism here differs greatly from the approach that they take in Iraq or Afghanistan. The British government must not pay off loyalists, as this despicable move would be blatantly hypocritical.
“Loyalists should never be rewarded by pay-offs from government. The UDA are adept at running extortion rackets, but lets hope that they cannot con the government into providing their pension fund out of local taxpayers money.”