DUP MP Jeffrey Donaldson said he "would not have" David 'Dee' Stitt as the head of a publicly-funded community group in east Belfast following controversial comments made surrounding the awarding of public money to the organisation.
But he said it was "a matter for Charter NI to decide whether or not he should remain".
It comes just days after Stitt, who heads up the organisation which was recently given almost £2 million of public money, launched a foul-mouthed attack on the government, claiming it does not care about Northern Ireland.
Stitt, a convicted robber and alleged Bangor UDA commander, also described loyalist band, the North Down Defenders, as "our homeland security" and added "we are here to defend north Down from anybody".
Charter NI and Stitt are also at the centre of a row over the £1.7 million funding for the east Belfast group from Stormont's Social Investment Fund (SIF). The funding is to manage an employment project based in the area.
With concerns that the UDA remains involved in criminality and intimidation in north Down questions have been asked about why Charter NI was hand picked to manage such a huge allocation of public money.
Mr Donaldson yesterday said he believed Stitt should not be the head of Charter NI.
"I have criticised what he said, I have said it is a matter for Charter NI to decide whether or not he should remain as their chief executive, I think these comments were highly regrettable, I do not support them in any way whatsoever," he told the Stephen Nolan Show.
"If I was in charge of Charter NI, I would not have him as my chief executive in the light of these comments but I don't run Charter NI, they have a board and these things have to be done legally - this is not Soviet Russia when you just issue edicts, you have to follow proper process."
Stitt was pictured last month with DUP leader and First Minister Arlene Foster following the announcement of the Charter NI funding. The project aims to get at least 300 people into employment over a three year period at a cost to the public purse of around £5,666 per person.
Mr Donaldson defended the First Minister standing alongside Stitt, who once served time for attempted armed robbery, when Charter NI was awarded the public money.
"We support Charter NI, we didn't appoint the chief executive, that is a matter for Charter NI. Arlene would not have been aware of his (Guardian Newspaper) comments (when she stood alongside him t to announce funding for his group)."
He added: "Charter NI do some excellent work in east Belfast. The First Minister has supported the work of Charter NI because of its transformation efforts of communities in east Belfast.
"And I am not going to condemn the work of an entire group of people because of the comments of one individual. I didn't appoint him, nor did the First Minister, nor did the DUP appoint him, he was appointed by Charter NI.
"Charter NI has the DUP's support."
