A former mayor of Limavady was released last night after he was arrested by detectives investigating paramilitary activity.
Sean McGlinchey (59) is the second Sinn Fein councillor to be held in the swoops around Dungiven, which started last Thursday when five people - including Derry councillor Tony McCaul - were arrested.
All of those arrested, now totalling seven, were questioned at Antrim PSNI station.
One of the men, who is 53, was released pending a report to the Public Prosecution Service. Mr McGinchey was released unconditionally.
Detective Chief Inspector Una Jennings, from the PSNI's Serious Crime Branch, said: "We are investigating various forms of paramilitary activity in the Dungiven area, predominantly over the last four years.
"These include shooting incidents and threats."
Feelings in the Co Derry town were running high as the news of the arrest filtered through, amid claims that the relationship between police and the community had been badly damaged.
One woman who did not wish to be named said: "Sean McGlinchey has done more for this town than anyone will ever know and he got people to support the police when a lot of them didn't trust them.
"Those same people will be wondering what it was all for, if this is the way the police are acting.
"I can't see them being supported any more."
Mr McGlinchey topped the poll in the election to the shadow council of Causeway Coast and Glens.
A source close to Sinn Fein in Dungiven described the line of questioning being put to Mr McGlinchey as "extremely flimsy", and suggested that, like Mr McCaul who is considering legal action, Mr McGlinchey will likely do the same.
Sinn Féin MLA Cathal O hOisin criticised the manner of Mr McGlinchey's arrest.
He said: "I am disappointed that the PSNI have chosen once again to mount a high-profile arrest operation of a local councillor.
"Sean McGlinchey's solicitor contacted the PSNI stating that his client would present himself voluntarily to answer any questions following the arrest of another Sinn Fein councillor last week on the most spurious of grounds."
He added: "Instead of this, the police arrived at his house around 8am and searched it before arresting Sean, which was totally unnecessary."
Mr McGlinchey was elected mayor of Limavady Borough in 2012. His appointment caused outrage among some unionists because of his IRA past.
The Sinn Fein councillor has repeatedly insisted that he regretted his actions and sought to express sorrow to his victims and their relatives.
Sean McGlinchey was jailed for planting an IRA car bomb in Coleraine in 1973 and spent 18 years in jail.
The bomb exploded at 3pm on Railway Road, killing six people and injuring 33. He has repeatedly said that he deeply regretted the bombing in Coleraine.
"What happened is my responsibility, those were my actions. If I had known innocent people would be killed I would never have done it.
"I regret the deaths and I have apologised."