The UDA will not receive public money in exchange for destroying weapons, Martin McGuinness has said.

The Deputy First Minister ruled out any payments after the loyalist paramilitary group said it had begun the decommissioning process.

The UVF and Red Hand Commando added it had put all its arms beyond use and wanted to fully engage in the democratic process.

Mr McGuinness said: “Money going into any area is on the basis of objective need and there are no other considerations.”

Sinn Fein has welcomed progress on loyalist decommissioning.

The main loyalist paramilitary groups were responsible for almost 1,000 deaths during the 30-year conflict.

The UVF said the decommissioning process began last autumn but was suspended after dissident republicans killed two soldiers and a policeman in Antrim and Craigavon, Co Armagh, in March.

Former UVF prisoner Billy Hutchinson helped negotiate with the IICD led by General John de Chastelain who four years ago witnessed destruction of the IRA's arsenal of guns, ammunition and explosives.

Meanwhile, US Secretary of State Hillary Clinton has welcomed the loyalist decommissioning moves confirmed on Saturday.

In a statement, Mrs Clinton said: “The announcements underscore the remarkable progress that has taken place in Northern Ireland over the years. All parties agree, as the people of Northern Ireland do, that the only way forward is through peace and reconciliation, and not through violence.

“Peter Robinson and other unionist leaders should be commended for their efforts in convincing these groups to take this courageous step. Leaders on all sides deserve our praise for their continued commitment to moving the process forward.”