Northern Ireland police said today that an ousted loyalist terror boss shot dead outside his father's house in Belfast last night was probably killed by his former colleagues in the outlawed Ulster Defence Association (UDA).

Six men were arrested this morning during police searches after the murder of 47-year-old Jim Gray and were being questioned at Antrim police station.

Gray, nicknamed "Doris Day" for his died blond hair and flamboyant dress, was the UDA's former "brigadier" for East Belfast and was also known as a major drug-dealer but was expelled from the paramilitary group earlier this year.

The killers are believed to have been lying in wait outside the house for Gray to return and shot him several times as he got out of his silver car in Knockwood, a loyalist enclave. He died at the scene shortly after 8pm and his body was left lying in the driveway of the semi-detached house beside the car.

Police sealed off the area and covered the body with a white sheet as a crowds of 30 local youths gathered.

"A significant and major line of inquiry is that Mr Gray was murdered by the UDA, an organisation with which he had an association in the past," said Superintendent George Hamilton, who is leading the investigation into Gray's murder.

The former paramilitary chief was released from prison on bail less than three weeks ago. He had been in custody since April facing charges involving money laundering.

At a bail hearing last month the prosecution said that the release of Gray could lead to an outbreak of violence, as he was under paramilitary threat.

Gray had many enemies and was not a difficult target to find - his address was well known and the terms of the High Court bail set last month put him under virtual night-time curfew in his house. He had also been ordered not to leave Northern Ireland and had to report to the police five times a week.

The paramilitary chief survived a previous murder attempt when he was shot in the face during a feud in 2002. He was arrested in April by detectives investigating alleged money laundering.

Police allegedly found a bank draft for €10,000 and nearly £3,000 in cash in his car when Gray was stopped outside Banbridge, Co Down. He was believed to have been heading for the Irish border.

Police said today that Gray had been a target both in prison and since his release.

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