Combat 18's message, broadcast by text and email all over Northern Ireland last week, was hate-filled and menacing:

"Romanian gypsies beware beware

"Loyalist C18 are coming to beat you like a baiting bear

"Stay out of South Belfast and stay out of sight

"And then youse will be alright

"Get the boat and don't come back

"There is no black in the Union Jack

"Loyalist C18 'whatever it takes'."

The rhyming racist warning has been picked up on mobile phones and computers across loyalist areas of the north of Ireland since the start of last week when the province hit the world headlines again for all the wrong reasons.

This weekend 110 Romanians, including many small children, some as young as six weeks, are under armed police guard at a secret location in Belfast. Seven days ago the 20 families were driven out of several properties on the edge of the city's university district, victims of a racist gang which repeatedly attacked their homes over a number of days. Many of the immigrants, almost all exclusively from the Roma community, have said they want to return home rather than stay in a city being branded as the racist capital of Europe.

The three-storey houses off the Lisburn Road where the Romanians lived, with one family of 18 staying on a single floor, were empty on Friday afternoon. Windows were boarded up in one of the houses on Belgravia Avenue while across the road, closer to Queen's University on Wellesley Avenue, there were still signs on the doors and windows of the attacks that drove them out.

On Friday evening, in nearby Donegall Avenue, police officers were raiding three homes, in the "Village", a working-class loyalist district wedged between the edge of the university and the M1 motorway. A 15-year-old and a 16-year-old were last night charged with provocative conduct, while the 15-year-old was also charged with intimidation of the Romanian families. Others have gone into hiding as the Police Service of Northern Ireland comes under pressure to erase what the city's lord mayor, Naomi Long, has called the "stain of shame" over Belfast.

The "Village", with its long rows of Victorian terraced houses running down towards Windsor Park stadium, home of the Northern Ireland football team, has been for some time the pressure point for racism in the province. In April, 46 Polish nationals fled from their homes after a series of co-ordinated attacks. The orgy of violence was carried out by a gang of loyalist youths in retaliation for the behaviour of Polish football hooligans who started a riot outside Windsor Park before the Northern Ireland-Poland World Cup clash, which the home side won 3-2.

Since the middle of the decade, foreign nationals from across the world who have moved into the area have been the target of racists. First, it was the Chinese whose homes were attacked, then the Poles and Slovakians, and latterly the Roma. At the end of 2004 there were an estimated 453 race hate crimes a year reported to the PSNI across Northern Ireland; in the past 12 months that figure has risen to 1,000.

There are plenty of people in the "Village" who, while condemning violence, are openly hostile to immigrants. One middle-aged woman in Olympia Drive, at the back of Windsor Park, who refused to give her name, complained that there were too many foreigners in her area.

"It was terrible putting wee children in danger, but they [the Romanians] are living on top of each other. They're begging outside shops and banks. They send their kids out to sell roses outside bars at night. They shouldn't be allowed to use their kids like that. They shouldn't even be allowed into the country because they don't want to work," she said.

Even along the prosperous Lisburn Road, with its restaurants, art galleries, organic cafes and boutiques, attitudes towards the Roma immigrants are negative; it is not difficult to find people who openly admit they do not like the eastern Europeans in their midst.

Dressed in a dark business suit, Derek Orr said he was "sick and tired" of the Roma. "You can't walk into a bank or shop on this road without a Romanian woman shoving a copy of the Big Issue under your nose or begging you for money. I don't mind the Poles and the Slovakians who come here. They work hard, harder than indigenous people from here, but all you see now are these Romanians begging and mooching about. We'd all be better off - them and us - if they went back to Romania or somewhere else in Europe," he said.

Even in the most deprived Protestant working-class redoubts, the far right remains electorally irrelevant. Nonetheless, neo-Nazi micro-groups have been trying to exploit the upsurge in racist violence. One is the Ulster British People's party (UBPP), which is linked to a breakaway faction of the British National party. Following the campaign of vandalism and intimidation of the Roma families, the UBPP has bragged about further racially motivated violence ahead.

"The latest attack on Romanian immigrants in Belfast serves as evidence that the previous incidents were not isolated ones," the fascist group warned this weekend. "It remains clear that the local population of Belfast are deeply disconcerted by the mass influx of immigrants, and by the looks of things, there will be more attacks to come unless something is done about the situation."

Anna Lo is the only parliamentarian in the UK from the Chinese community, and represents South Belfast in the Northern Ireland assembly. Originally from Hong Kong, Lo has experienced racism herself through the years but adds that it has intensified with the end of the Troubles.

"I recall Combat 18 stickers being left on the walls of Chinese takeaways on the Donegall Road. Every ethnic minority has been targeted in this corner of south Belfast over the past 10 years," she said.

On Friday evening, Lo visited the Roma families and said they were determined to leave Northern Ireland after their ordeal: "They were a bit upset after the Romanian consul talked to them, because he told them there was no money to bring them all home. They all still want to go home."

Lo said several of the children are ill and one man on Friday had to be treated for chest pains by a doctor sent from a local hospital. "The men have all lost their jobs. Most of them used to sell the Belfast Telegraph [the city's evening paper] at roundabouts and traffic islands around Belfast. They tell me there is no future for them here any longer."

Although those behind this latest outbreak of racist violence are not being directed by any loyalist paramilitary group, their actions last week took the world's focus away from what is a positive, developing story within Ulster loyalism. All three main loyalist paramilitary movements have begun decommissioning their illegal weapons, and in the case of the Ulster Volunteer Force have put what has been described as a "significant quantity of arms" beyond use. The development, another major boost for Northern Ireland's power-sharing project, was eclipsed by the pictures of Roma families fleeing for sanctuary like refugees from a war zone, first into a Belfast church and later to a sports arena.

The fear within the loyalist paramilitary leaderships is that, as they leave the scene, a vacuum within their communities could be filled by the far right.

"We have a job on our hands now persuading an entire generation that grew up looking up to men who took up arms for the loyalist cause that violence is not the answer," one senior UDA member told the Observer yesterday. "I don't believe this gang behind these latest attacks are that well organised, but the danger from now on is that these teenagers and young people could be manipulated and used by these neo-Nazi groups who are trying to organise in Ulster."

Taking time off from negotiations with the British government about moves by the UDA to disarm, the loyalist leader said he believed the gang were "copycat racists" who were adopting Combat 18's name to instil fear into the immigrant community. "They [the BNP, UBPP and other neo-Nazi parties] have been stirring things up at time when the loyalist groups are trying to transform our communities," he added.

Yesterday afternoon hundreds gathered in Belfast city centre to protest against the attacks on the Roma and demonstrate another side to Northern Ireland to the world. Those marching included Paddy Meehan, a neighbour of the Roma families who helped them to move and has since been told by police that his own house will be targeted by the same gang. Meehan fled his home after the police picked up another text message doing the rounds among racist groups and their supporters in Belfast. It warned that the anti-racist campaigner would "come to a real fire... Paddy Meehan you're next".

Community leaders, the police and even loyalist paramilitaries said this weekend that the small hardcore group of racists who carried out the attacks are oblivious to the shame they have brought on their city. For the text messagers and emailers boasting of Combat 18 connections, the yearning of the Roma in hiding to return home must now seem like some kind of perverse victory.