David Ervine's party is linked to the UVF and Red Hand Commando

There had been speculation the party would distance itself from the UVF, but PUP leader David Ervine said his party would work in partnership with them.

"(The UVF) have a lot to talk about, they have a lot to sort out," he said.

"Do we want to give them the time and space to sort it out, well the PUP is saying yes, give them space and let's get it sorted out."

In a statement issued on Saturday, the party said it would instead "work in partnership with all those committed to transforming loyalist communities".

The statement was released after the party's annual conference in Belfast.

The PUP is also linked to the Red Hand Commando.

In July, Northern Ireland Secretary Peter Hain withheld the party's assembly allowances for another year.

The decision followed the latest report from ceasefire watchdog, the Independent Monitoring Commission (IMC).

In September, the IMC blamed the UVF for five murders and 15 attempted murders as part of its feud with the Loyalist Volunteer Force.

Mediation attempts

A special report said the LVF carried out two murder bids, but their violence was mainly a response to UVF attacks.

Its report on the loyalist feud led NI Secretary Peter Hain to declare the UVF ceasefire had broken down.

The IMC said it had noted statements by the Progressive Unionist Party indicating that they could not stop the feud, but said the party could not have it both ways.

They must disassociate themselves from the UVF or accept the consequences, it said.

Meanwhile, a Presbyterian minister, who has been talking to the leaders of the UVF and the LVF, said he was hopeful of a breakthrough in efforts to end the feud.

The Reverend Mervyn Gibson, who sits on the Loyalist Commission, told the BBC's Inside Politics programme on Saturday that attempts to mediate were "still continuing".