FIRST Minister Arlene Foster refused yesterday to back Martin McGuinness's call for UDA boss Dee Stitt to stand down as chief executive of Charter NI.
The DUP leader said she regretted that Stitt had now become "a distraction" but claimed she could not influence the organisation over employment issues.
The comments came after her Sinn Fein partner in government said the north Down loyalist should "consider stepping aside" as head of the publicly-funded body.
Last month Mrs Foster was pictured alongside Stitt when it was revealed that Charter NI was to manage a £1.7m employability scheme in east Belfast.
The money, signed off by the first and deputy first minister, came from the controversial Social Investment Fund (SIF).
Stitt has come under intense political pressure to leave his £35,000-a-year post following an interview with the Guardian newspaper during which he made a foul-mouthed attack on the British government and described his loyalist flute band as “homeland security”.
Both Arlene Foster and Sir Jeffrey Donaldson have said in recent weeks that they understood Stitt would not longer be chief executive.
She said: "That's good because I think Dee Stitt has become the story and not the employability scheme".
However, Mrs Foster told the BBC yesterday: "This man is an employee of Charter NI and they have to deal with him as they see fit, it would be wrong for me to intervene in all of the different organisations that exist across Northern Ireland."
The loyalist, a convicted armed robber, has refused to step down and sources say he has the support of the UDA in his determination to stay on regardless of political pressure.
The Charter NI board has issued him with a final written warning about his behaviour but backed him to remain in post.
The Executive Office has said checks on governance and financial management arrangements of the organisation were carried out as part of normal SIF procedures.
However, SDLP assembly member Nichola Mallon called yesterday for an independent review.
"The First Minister and Deputy First Minister hand an organisation £1.7m of public money without transparency and behind closed doors under SIF," she said.
"The CEO of this organisation, a self-confessed UDA boss, engages in unacceptable behaviour and the First Minister, one year on from the Fresh Start Agreement, says it's not appropriate for her to make comment or get involved.
"Where is the accountability? What message does this send out to the public and other groups across Northern Ireland? How is this a Fresh Start?"
Ulster Unionist leader Mike Nesbitt also claimed the situation had effectively developed into "a stand-off between the Northern Ireland Executive and the UDA, between democracy and paramilitarism".
"I am calling on the Executive to say that there is a line in the sand after which there will be zero tolerance of paramilitary organisations," he said.
