Brian Service, 35, was shot dead as he walked home in north Belfast early on Saturday.

LVF declared a ceasefire six months ago

The dissident group of disaffected loyalists, which opposes the peace process, also admitted responsibility for an attack on a bar in republican west Belfast an hour before the shooting.

And it has admitted being behind the bomb blast that killed RUC Constable Frankie O'Reilly after rioting by loyalists in Portadown, County Armagh in September.

The Red Hand Defenders emerged during the Drumcree crisis this summer when the loyalist Orange Order was banned from marching down its traditional route in Portadown.

BBC Ireland Correspondent Mark Devenport said: "There are some security sources who say this group is not very different from the Loyalist Volunteer Force.

"But whether they are or not, clearly they are a dangerous faction."

The LVF says it has abandoned violence for good.

In a statement in August it said it was declaring an "absolute, utter finish" to its terror activities, the first such announcement from a paramilitary organisation in the province.

And last week an LVF spokesman reportedly told the Times newspaper: "The group is finished. The war is over."

Frankie O'Reilly: Killed by blast bomb

However, despite the LVF claims, the government has so far not officially recognised the cessation of hostilities as genuine.

Northern Ireland Secretary Mo Mowlam is wary that the tactic may be a ploy to get its prisoners released early.

The LVF, formed in 1996, soon established a reputation for ruthlessness, including the murder of a young Roman Catholic girl as she slept beside her Protestant boyfriend.

Its aim has been to defend - by terror - British rule over Northern Ireland against the Irish Republican Army and other pro-united Ireland groups.

Under the leadership of Billy Wright it drew its membership mainly from the mid-Ulster region.

But since Wright's murder in the Maze Prison last year, its size has declined rapidly and is currently thought to have little more than 50 members.

Brian Service: Latest victim

Mr Service, who had no paramilitary or criminal connections, was shot several times in the head and back as he walked home along north Belfast's Alliance Avenue, a volatile area between Catholics and Protestants.

Constable O'Reilly, 30, a father of three children, died in October after clinging to life for five weeks.

He was hurt when a loyalist mob bombarded police with missiles during rioting in Portadown.

The trouble followed the protest by Orangemen demanding the right to march from Drumcree parish church along the Garvaghy Road, which passes a nationalist estate.