Social Development Minister Margaret Ritchie is expected to pull funding for a loyalist conflict transformation initiative later this week - informed sources have predicted.
A news conference at which she is expected to make her announcement could happen on Thursday, according to one source.
Today is the deadline set by the minister for the UDA to begin decommissioning, but while there have been talks with the arms general, John de Chastelain - as exclusively revealed in this newspaper on Friday - no weapons have been put beyond use.
A loyalist source told this newspaper he expected the funding for the conflict transformation initiative to be withdrawn.
"It's a pre-destined decision," he suggested.
"I believe that she is going to pull it," he continued.
The issue is believed to have been raised at a meeting of the Executive yesterday evening.
But an informed source has told this newspaper that Ms Ritchie's position has not changed.
He expects a statement and a news conference possibly on Thursday when the minister returns from Brussels.
"She doesn't want to make a statement from Brussels," the source said.
Asked if there was any indication of the minister backing off, he replied, " No".
And asked did he expect her to pull the funding, he said, "Yes".
The minister set her 60-day deadline for decommissioning after the UDA was linked to street violence in Carrickfergus and Bangor.
Representatives of the UDA met the IICD on Friday, and afterwards it was reported that a "meaningful engagement" had begun and that " named interlocutors have been appointed".
General John de Chastelain left Northern Ireland after the talks - an indication that the UDA was not going to meet the minister's requirement for an actual start to decommissioning by today.
"The UDA cannot go beyond the UVF," a loyalist source told this newspaper - "so, there's an impasse."
Earlier this year the UVF said its weapons had been put "beyond reach" - but not beyond use.
On his prediction that the minister was going to pull the funding for the conflict transformation initiative, the loyalist source said: "Things aren't good. They are very depressing. Where do you lead people after this?"
Margaret Ritchie is on a visit to Brussels representing the Executive.