The government has announced that it will give more than £1m to a project aimed at moving the UDA away from violence and crime.
The Ulster Political Research Group has spent the past six months drawing up a business plan to persuade the government to fund a 3-year project.
It said this could help transform the UDA into a non-paramilitary group. The strategy appears to have worked.
The funding was announced by Social Development Minister David Hanson.
"I expect that this additional support will deliver a quickening in pace of the work of the UPRG in their conflict transformation work that the latest IMC report identified was required," he said.
The £1.2m will be used in six areas where the UDA has a strong presence, and to employ up to a dozen staff.
The project will be administered by Farset Community Enterprises, a community organisation based in west Belfast.
It will also be closely monitored by officials from the Department for Social Development.
The funding application was drawn up after widespread consultation with UDA members in a series of meetings throughout Northern Ireland.
The UPRG claimed there was a genuine desire to change and for the UDA to become a community association rather than a terrorist group.
In return for the funding, the government wants to see the end of all UDA violence and criminality, including extortion rackets and drug dealing.
If there is no noticeable reduction in these activities, the UPRG has been told that the funding will be withdrawn.
'An integral part'
Secretary of State Peter Hain said: "For some time now, the political leadership of the loyalist community associated with the UDA has wanted to move the whole of the community away from paramilitarism and gangsterism and criminality onto a democratic political path.
"Onto a path where the loyalist cultural and political tradition can be respected in a normal rule of the law and peaceful fashion.
"But not one involving violence or intimidation or any kind of paramilitary activity.
"We gave them a trial period, over a period of months to see how this work could progress and now we have agreed a long-term support for this objective, which I think is vital."
Frankie Gallagher of the UPRG said "the community is the paramilitary organisation... they (the UDA) are an integral part of the community".
"The money is not going to the UDA, it is not going to UDA personnel or into their coffers," he said.
"It is going to a legitimate organisation which has existed for some 20 years and which has been at the forefront of peace-building in Northern Ireland and in the Republic of Ireland."
He added: "We have to face up to a new reality in Northern Ireland. We have to make peace by talking to our enemies that we don't like talking to - you do not make peace by talking to your friends."