On the night of 10 November 1986, more than 2,000 men descended on Ulster Hall, a grand Victorian concert venue in the centre of Belfast, for an invitation-only event organised by the Democratic Unionist Party (DUP). They had been bussed into the city from across Northern Ireland to protest against the Anglo-Irish agreement, a treaty that gave Dublin an advisory role in the government of the north.

Inside the hall, a lone piper led a parade of flag-bearing men in red berets and matching military-style uniforms. Those assembled then sang a hymn, O God, Our Help in Ages Past, which they described as “Ulster’s battle hymn”.

Presiding over the rally was the DUP lord mayor of Belfast, Sammy Wilson. Among those present were the DUP leader, Ian Paisley, and his deputy, Peter Robinson. Paisley warned his audience that some of them “would not see the end of the campaign which was just beginning”.

Journalists arrived at Ulster Hall, after hearing that the rally was being convened to mobilise what the next day’s newspapers described as a “secret army”. They were refused entry, but a young DUP press officer called Nigel Dodds emerged to hand out leaflets. These explained that a body called Ulster Resistance was being formed as an “organised and disciplined force, which will neither bend nor budge” until the Anglo-Irish agreement was destroyed.

Over the coming days and weeks, there were more rallies and marches across Northern Ireland. Paisley and Robinson appeared wearing the bright red berets of Ulster Resistance. Paisley declared: “Every Ulsterman must be recruited to resist – by whatever means the situation demands – those who would drive us against our wills into an all-Ireland republic.”

An Ulster Resistance Rally in Ballymena in 1986. Photograph: Pacemaker

The following year, Ulster Resistance joined forces with the two established loyalist paramilitary groups, the Ulster Volunteer Force (UVF) and Ulster Defence Association (UDA), to smuggle an enormous arsenal of weapons into the province, including about 200 Czech-made assault rifles called VZ58s and tens of thousands of rounds of ammunition.

Over the next 17 years, these VZ58s would be used in the murder or attempted murder of about 70 people in Northern Ireland. In the early 90s, they were used in three massacres: gunmen stood at the doors of a bookmaker’s shop and two bars, and simply sprayed the room. Nineteen people died and 27 were wounded.

Today, the DUP is a party that prides itself on its robust approach to law-and-order issues; the criminal justice section of its website declares that “there must be no amnesty for wrongdoers; there must be no rewriting of the past”. On Monday it completed its deal to prop up the minority Conservative government in return for £1bn of extra funding for Northern Ireland.

But the party continues to be haunted by the role that its hierarchy played in setting up Ulster Resistance, and the way in which this group helped to illegally import the deadly haul of VZ58s. Sammy Wilson is now the DUP MP for East Antrim. Nigel Dodds is now MP for Belfast North and leader of the party’s 10 Westminster MPs.

Emma Little-Pengelly after being elected as the MP for South Belfast in June. Photograph: Niall Carson/PA

Perhaps even more uncomfortable for the DUP are the lingering questions about any role that a man called Noel Little may have played as an Ulster Resistance gun-runner. Little’s daughter, Emma Little-Pengelly, is a newly elected DUP MP. One of the VZ58 massacres, in February 1992, in which four Catholic men and a child were shot dead and nine people were injured, took place at a betting shop on the Lower Ormeau Road, in the heart of her Belfast South constituency.

It is not unusual for politicians in Northern Ireland to have been involved in political violence during the Troubles, of course, and many have been far more intricately involved than members of the DUP.

Sinn Féin’s Martin McGuinness, the deputy first minister until he resigned last January, bringing about the collapse of power-sharing, was probably the province’s best-known paramilitary turned politician. But Sinn Féin’s ministers and committee chairs at that time included a number of former members of the IRA, including a couple of convicted bombers.

This has not prevented the DUP and Sinn Féin sharing power for almost a decade, working together because they needed to. But the DUP is particularly sensitive about the role Ulster Resistance played in fuelling the violence in the late 80s and 90s.

In June last year, the police ombudsman for Northern Ireland, Michael Maguire, published a report on another of the VZ58 massacres, in which six people were shot dead and five wounded while watching football inside a tiny a bar in the County Down village of Loughinisland in June 1994.

Maguire had agreed to re-examine those murders after years of complaints – well founded, he concluded – that the lack of progress in the police investigation pointed to collusion between some police officers and the killers. Two retired police officers have since launched a legal challenge to the report, arguing that Maguire exceeded his powers.

Maguire also investigated the provenance of the VZ58 used at Loughinisland. “My investigators have seen police intelligence that in December 1986 senior members of the UDA, UVF and Ulster Resistance met to discuss the purchase and importation of arms with funds jointly raised by the three organisations,” Maguire reported.

The weapons were to be purchased with the proceeds of a bank robbery which the UDA staged in County Armagh the following July.

The next month, the police had intelligence that the weapons were being procured by three men, including one whom Maguire identified as Person D, from Ulster Resistance.

The weapons – including the VZ58s, hand grenades and rocket launchers – were smuggled into Belfast, via Liverpool, in a shipping container said to hold floor tiles, and then taken to a farmhouse in County Armagh, to be divided among the three groups.

The UDA lost its share of the cache almost immediately, when a convoy of cars stuffed with rifles and ammunition was halted at a police roadblock. The man in command of the convoy, a leading UDA figure called Davy Payne, was later jailed for 19 years.

By this time, according to intelligence reports, Person D had already taken the Ulster Resistance share of the weapons. About half of the weapons that the UVF took away from the farmhouse were also recovered, after a tipoff led police to a house in north Belfast, but the rest remained under the group’s control.

During the following weeks, Person D was arrested but denied all knowledge of the arms importation and was released without charge, the ombudsman reported. “The arrest of Person D appears to have been linked to his telephone number being found on [Payne].”

In November 1988, 10 people were arrested after the discovery of one of Ulster Resistance’s arms dumps near Markethill in County Armagh. Police found three of the VZ58s, an RPG-7 rocket launcher and five rockets, as well as more than 12,000 rounds of ammunition. They also discovered parts of a Javelin ground-to-air missile system, stolen from an arms factory in Belfast. The haul was put on show for the press, along with a number of red berets bearing Ulster Resistance badges which had been found with the weapons.

At this point, the DUP could not disown Ulster Resistance quickly enough. Wilson told reporters that, though the party had given the organisation “political cover and political sponsorship”, and that members did not need to apologise for attending its rallies, he had not had contact with it since the launch at Ulster Hall.

The DUP issued a statement, saying it had already severed all links. “While not members of the organisation, we openly and publicly encouraged recruitment and canvassed support for the organisation and its aims,” the statement said. “Some time later we were informed the organisation was put on ice, and our association and contact was terminated. At no time during our association was anything done outside the law and no member was ever charged with any offence.”

Ulster Resistance had not been put on ice, however. Five months after the Markethill find, Noel Little – who lived in Markethill – was arrested in Paris, along with two other men, James King and Samuel Quinn. The three had been caught red-handed while attempting to procure more weapons.

The VZ58s had been acquired in Beirut with the assistance of Armscor, a defence procurement agency that the South African government had established to evade a UN arms embargo. This time, Ulster Resistance was offering not cash in return for weapons, but technology: the South Africans were eager to develop a new portable ground-to-air missile, and Little and his two friends were hoping to trade stolen parts from the British Starstreak missile that was under development at the same factory from which parts of the Javelin missile had been stolen.

The three were arrested by officers of the French security agency, Direction de la Surveillance du Territoire (DST), which burst into the room at the Paris Hilton, where they were meeting a South African intelligence officer who called himself Daniel Storm. At exactly the same moment, Armscor’s European agent, an American called Douglas Bernhardt, was grabbed in the foyer of the Hotel George V, and carried out of the building to a waiting car.

Storm was set free after claiming diplomatic immunity. The others were interrogated in the basement of the DST’s headquarters. “I was slapped about a little,” Little recalled later. “But not too much.”

After eight months on remand, the four men were brought to court charged with arms trafficking, handling stolen goods and terrorism-related conspiracy. Bernhardt told the court that he had helped supply loyalists with the VZ58s from Lebanon in 1987. They were sentenced to time served and fined between 20,000 and 100,000 francs which, at that time, was equivalent to between £2,000 and £10,000.

But the VZ58s that had already been smuggled into Northern Ireland were quite enough to send the loyalist killing rate through the roof. “There’s no doubt that shipment did change things,” Little said. He believed those weapons “tipped the balance against the IRA and eventually forced them to sue for peace”. And while he said he deplored the murder of innocent people, he added: “Innocent bystanders are killed in every war.”

Little has continued to deny he was involved in the importation of the VZ58s from Beirut in 1987. But when interviewed by the Guardian in 2012 he used a curious form of words to issue that denial. “My position is that I wasn’t involved,” he said, adding: “I would deny it even if I was.”

He also said that many of Ulster Resistance’s share of the weapons had not been decommissioned as part of the peace process in Northern Ireland. “As far as I know they are still stockpiled.”

Little also said that he had been arrested in Northern Ireland in early 1988 after his telephone number was found written on the back of Payne’s hand. It had been given to Payne, Little explained, “in case he got into any trouble in Armagh”.

Noel Little (far right) at a rally alongside Peter Robinson (second from left). Photograph: Pacemaker

Four years later, the police ombudsman reported that the person who was arrested after his telephone number was found in this way – the individual whom he describes as “Person D” – had “performed a significant role” in the loyalist gun-running operations of 1987 and 1989. This would strongly suggest that Little is Person D. But if he is, it would mean that he had played a key role in smuggling into Northern Ireland the automatic rifle that was used to kill five innocent people in a betting shop; a betting shop that lies within what is now the parliamentary constituency of his daughter, Emma Little-Pengelly.

When asked, after his daughter’s election, about his arrest, Little sought to deny that this had happened. “The story about the phone number is apocryphal as far as I can determine,” he said.

Little was then reminded that, five years earlier, he had volunteered the information that he had been arrested after the discovery of the telephone number, during an interview with the Guardian. He replied: “All this stuff has changed from an interesting historical story to something much more sinister.”

Little denied that he was Person D, denied that he had been involved in bringing the weapons into Northern Ireland from Beirut, and said no charges had ever been brought against him in relation to that consignment.

Nor was anyone ever brought to justice for the murders at the Ormeau Road bookmakers, although there is also an investigation by the police ombudsman into police responses following a series of murders by loyalist paramilitaries in south Belfast in the 1980s and 90s, including that massacre.

One man was jailed for 20 years after being found in possession of the VZ58 that was used. The families of those killed – including 15-year-old James Kennedy – were told that the weapon had subsequently been disposed of.

The families took that to mean it had been destroyed. In fact, the rifle was taken to London and put on display at the Imperial War Museum: the weapon used in an unsolved murder was placed in a glass case for visitors to gaze upon.

Theresa May with DUP leader, Arlene Foster, announcing the agreement between their parties. Photograph: Stefan Wermuth/Reuters

The DUP may have distanced itself from Ulster Resistance and Noel Little many years ago, but it is unable to erase completely the memories of the role it played in creating the organisation that imported the weapons that caused such mayhem.

The party was embarrassed to be endorsed during the general election by a body called the Loyalist Communities Council, which is backed by the UDA and the UVF, and said it refused to accept that support. The party’s leader, Arlene Foster, also faced criticism for meeting a UDA leader during the campaign, days after the organisation had murdered a man in front of his three-year-old son.

Following the publication of the ombudsman’s Loughinisland report, the Belfast News Letter – a pro-Unionist newspaper – asked the DUP whether it would apologise for its role in founding Ulster Resistance. It said in a brief statement: “The party’s stance is consistent, that anyone involved in illegal activity should be investigated and face the full weight of the law.”

As the DUP and the Conservatives reached their agreement on Monday, the party reiterated that it broke ties as soon as the arms smuggling became known. In a statement that the party said also covered Wilson, Dodds and Robinson, a spokesman said: “The party immediately distanced itself from Ulster Resistance and severed all links with it once it became known that it was involved in unlawful activity.”

One person who has not disowned Little is his daughter, Emma, who did not respond to a request for a comment. She was nine years old when he was arrested. Two years ago, when she was elected as a member of the Northern Ireland assembly, she wrote an article for the Belfast Telegraph. She described the impact on her family’s life of “the sudden and unexpected arrest of my father in Paris” leading to him losing his job and being absent for years.

But, she added: “What comment do I have on my daddy? Simply put, I love him, he is the only one I will ever have, and my love for him is unconditional.”