The meeting was to have taken place last night. Fourteen senior members of the UDA and UVF were due to gather to agree a truce to end the loyalist feud. The deal had been arranged in principle. Only the details remained to be hammered out.

But the meeting never happened. Instead, there was a killing. A man in his 20s was shot dead in Newtownabbey, on the outskirts of north Belfast.

Four people have now been killed in the area in five days. Tensions are as high as when the feud began in August and three people died. "We are back to square one," said a senior loyalist source involved in trying to broker a deal.

More worryingly, the deaths until last weekend had been restricted to the Shankill area. Now, they have spread to north Belfast. The UDA is believed to have been responsible for last night's shooting. The victim allegedly had UVF associations.

The trouble on the Shankill was connected with politics. The local UDA is strongly anti-agreement; the UVF supports the peace deal. While the same situation largely prevails in north Belfast, the political element is less central to the feud there. It is more a turf war involving the settling of old scores.

It started on Saturday when the UVF shot dead UDA member David Greer (21).

The previous night there had been an argument between UDA and UVF men in a local drinking club. A UDA man was beaten up. The next morning, the UDA intimidated several families from their homes in Tigers' Bay. Later that night, carloads of UVF men arrived in the area. A confrontation developed during which Mr Greer was killed.

"It wasn't planned," said a loyalist source. "But there is a UVF team in the Mount Vernon area which is totally out of control."

Moderates in the UDA leadership who had no sympathy for their Shankill Road C company and who desperately wanted a ceasefire were incensed. "It was a blatant act of aggression," one said.

"The UVF were expressing doubts about whether we could control C company and yet their own men were running amok."

The UDA in north Belfast retaliated. On Tuesday, Herbert Rice (63) was shot dead in his bungalow in Tigers' Bay. A former UVF internee, he worked for Progressive Unionist Party member Mr Billy Hutchinson. He was no longer militarily active. He had moved into the house, in a UDA area, because it was comfortable for his invalid wife. He did not believe he was a target.

Senior UDA sources said he was killed because UVF "players" had gone to ground and he was a soft target. They also claimed there had been animosity towards Mr Rice because he was allegedly involved in the killing of two UDA men in the 1970s.

The UVF response was swift. Within hours, Tommy English, a former prominent member of the UDA and its political wing, the Ulster Democratic Party, was shot in his Newtownabbey home. He was another soft target.

MR English (40) had been on the UDP Stormont talks team and on a delegation to meet President Clinton at the White House. He had also been involved in organising UDA "punishment" squads and Drumcree protests in 1998. Ill-health forced him to "retire" 18 months ago and, although he still supported the UDA, he was no longer active.

By killing someone with such a previously high profile, the UVF had upped the ante. The UDA leadership wanted no vengeance but grassroots thought otherwise. The retaliatory killing came last night.

Relations between the political wings of the paramilitary groups are at an all-time low.

The refusal of Mr Hutchinson to condemn UVF killings, or to call on the paramilitary group to stop, has angered even moderates in the UDP like party leader Mr Gary McMichael. Mr Hutchinson last night said there was no point in calling for calm.

Mr McMichael said: "We are telling the UDA to immediately and unilaterally end the violence but when Billy Hutchinson won't do the same, it makes the situation very difficult and dangerous."

His concern is shared by DUP Assembly member Mr Nigel Dodds. Since the weekend, 17 families in north Belfast have been forced to leave their homes.

"The stability of the whole area is under threat," said Mr Dodds. "I fear it will get worse."