Loyalists arrested during a raid on a Belfast bar were preparing to announce an end to all Ulster Defence Association crime, a court has heard.
Ihab Shoukri is charged with UDA/UFF membership
The claim was made during a police application to have the bail revoked of prominent loyalist Ihab Shoukri.
He was arrested along with 16 others in north Belfast. He was later released.
A defence solicitor said the police believed they were involved in "show of strength" but had actually been discussing the end of UDA criminality.
Mr Shoukri, 31, from Alliance Road in north Belfast, denied membership of the Ulster Freedom Fighters and Ulster Defence Association at his last court appearance.
At Belfast Crown Court on Tuesday, the judge was asked to examine if Mr Shoukri was in breach of bail conditions imposed while he awaits trial.
A defence solicitor said his client had been downstairs in the Alexandra Bar in the Tiger's Bay area, when a specialist police unit fired up to 70 CS gas canisters into the building to try to capture those at a meeting in an upstairs room.
He told the court: "It's somewhat ironic that the plea had been advanced by police that the individuals in the upstairs bar were involved in some sort of show of strength.
"In fact they were attending a meeting, the result of which was to announce the end of all criminal activities by the UDA.
"Police have documents to prove that."
A Crown lawyer said she accepted Mr Shoukri was "not dressed in paramilitary gear."
"It's the police case that by the defendant being present on the date in question with persons in paramilitary uniform and with UDA documents, he has re-offended and his bail should be revoked," she added.
But a defence solicitor said there was no substance to the evidence against Mr Shoukri.
Chief Constable Sir Hugh Orde defended the police operation
He added: "The chief constable has sought some sort of gladiatorial contest to pitch himself against the defendant."
Defence said it was "scandalous" that the move should be made against Mr Shoukri simply for being in a bar having a pint when the raid happened.
He also disputed police claims that Mr Shoukri was in a downstairs store with men dressed in paramilitary gear when it was raided.
Judge Tom Burgess reserved his ruling until Wednesday.
Eleven men have been remanded in custody in connection with the police raid on the bar.
Speaking at a press conference at the Policing Board in Belfast, Chief Constable Sir Hugh Orde defended Thursday night's police operation.
He said that what was going on in the Alexandra Bar was certainly "no teddy bears' picnic".
Meanwhile, a statement allegedly found during the police raid has been read out at a separate High Court bail hearing.
It said: "We must now take our fight into the political arena. However, this does not spell the end for the UDA. We want to reassure you all that the Ulster Defence Association is here to stay."
The handwritten document was read out as three men, including the owner of the Alexandra Bar, applied for bail. All three were released.