Government funding of a loyalist initiative is to stop in 60 days unless the UDA starts to decommission arms.
The UDA has been linked to recent violence
Social Development Minister Margaret Ritchie was referring to money aimed at helping to move the paramilitary organisation away from violence.
On Friday, she announced she would not keep supporting the £1.2m project without clear decommissioning evidence and reduced criminality.
Recent violence in Carrickfergus and Bangor has been linked to the UDA.
The SDLP's Ms Ritchie said: "There is no excuse now for paramilitarism. It is time for all those who subject their communities to thuggery, extortion and violence, under the pretence of defending them, to get off the stage."
In March, the Northern Ireland Office pledged more than £1m to the Conflict Transformation Initiative (CTI) project involving the Ulster Political Research Group.
Margaret Ritchie says the UDA must decommission its arms
The project aims to encourage redevelopment in loyalist communities.
The Ulster Political Research Group gives political analysis to the UDA.
UPRG spokesman Frankie Gallagher said: "I think what she's saying is there has to be some meaningful engagement with the IICD (Independent International Commission on Decommissioning), etc."
"The good thing is that there is already engagement with the international decommissioning body and there is already meaningful engagement with the IMC (International Monitoring Commission).
"And at least 40 meetings have taken place in the last two to two-and-a-half months with the PSNI working on crime and criminality."
Even before the recent violence Ms Ritchie warned that the money would be stopped if the UDA did not decommission its weapons.
There had been calls for the £1.2m funding to be withdrawn following the trouble.
The minister said the actions of recent days were a "clear breach" of the basis on which funding was awarded.
"The funding will end 60 days from now unless there is clear and demonstrable evidence that the UDA has engaged meaningfully with the Independent International Commission on Decommissioning and has started to decommission its weapons," she said.
The minister said it was "the last chance saloon" for the UDA.
Mr Ritchie's department is responsible for a policy approved by her direct rule predecessor.
Speaking following the announcement, Policing and Justice Minister Paul Goggins said loyalists must "demonstrate real leadership to set their communities free from criminality and the influence of paramilitaries".
Sinn Fein's Alex Maskey accused the social development minister of not showing decisive leadership.
"Two months ago Margaret Ritchie said she was going to stop this funding. Two months on and she is now saying that she is giving them another two months," he said.
Ulster Unionist leader Sir Reg Empey said while he thought most people within the UDA were committed to peace, the paramilitary group "needed to do more".
Alliance leader David Ford said that Ms Ritchie's ultimatum given to the UDA over its funding was "long overdue".
Chief Constable Sir Hugh Orde has previously said he "would not give the UDA 50p".