Anyone passing through the Co Derry town of Magherafelt would take the Leckagh Drive Estate for a loyalist stronghold. The kerbs are freshly painted red, white and blue, and bunting and Union Jack and Ulster flags hang from most of the red-brick houses. In fact, ten years ago, almost half the residents were Catholics.

Now, more than 80% are Protestant. Catholics are leaving. They are being driven out by a loyalist criminal gang using pipe bombs, petrol bombs, stones and human excrement as weapons in its campaign of intimidation.

Since April, one in ten of the Estate's 131 Housing Executive tenants have presented as homeless, and seven have so far been re-housed. Others have found private rented accommodation outside the area. Several of the 50 or so privately owned homes in the Estate are for sale. At the Housing Executive's offices in the town, notices from people looking to move to Magherafelt include the proviso, "any area except Leckagh".

Last week, a Catholic family woke to find a hoax bomb on the windscreen of their car, which had been pelted with eggs. The family have applied for their house to be bought by the authorities under an emergency scheme. Another woman found a coffee jar made up to look like a bomb. Part of the Estate had to be evacuated for three hours while police examined the device.

John Quinn, a pensioner, decided earlier this year that he and his wife couldn't take any more harassment and moved to a rented flat in another area.

"The trouble started on 6 July last year," he said. "I was Chairman of the Community Association and we were trying to get the Estate tidied up. This boy "B" [he named the loyalist ringleader] came to my door and called me a Fenian bastard and an IRA this and that. I told him to leave. I said, 'I'm an old man but I'm not afraid of you'. But I was afraid, a wee bit." Two days later, in the early hours of the morning, the PSNI came and told the Quinns there was a bomb in their front garden. Two days after that, there was one at the back. Then human excrement was smeared over the windscreen of the elderly couple's car. "They clodded the windows with stones and they clodded them with eggs. These boys are criminals - B goes round here selling counterfeit money and stolen cigarettes."

Local SDLP councillors Patsy McGlone and Joe McBride have been helping some of those displaced from the Estate. "In the first instance, this is a law-and-order situation," said McGlone. "These are criminals with full time anti-social tendencies. They are loosely associated with the UDA and the LVF - these aren't top-of-the-range terrorists but they are capable of making pipe bombs. They need to be locked up." McGlone said local unionist politicians had been "utterly silent" on the issue. "None of them has taken these people on or showed any kind of solidarity with the Catholics who have been terrorised," he said. The most prominent local unionist is the DUP's Reverend Willie McCrea. He was unavailable for comment.

Local PSNI Superintendent Terry Shevlin, who met the SDLP to discuss the problem this weekend, said policing alone couldn't solve the problem. "We need a cross-political party influence," he said. "It would help if there was more collective condemnation and more efforts to bring about a good influence. These people need to be challenged." Some of the victims of the intimidation have also been critical of the police. "They promised everything and did nothing," said Quinn. Shevlin disputed this. "We have increased patrols coming up to the 12th and we have made significant arrests. The ringleader of this group has been charged with a serious offence. Sectarian intimidation is totally unacceptable behaviour." Shevlin knows how bad all this can get - he was based in Ballymoney when loyalists murdered the three Quinn children by petrol-bombing their home in an estate in the town in 1998.

Loyalists in the Estate claim there is no intimidation.

"There's a lot of lies being told," said one woman. "This has always been a Loyalist Estate," said a man. "There's Catholics who don't like the bonfires and the bunting and the flags and they are jumping on the bandwagon and claiming intimidation. There's no trouble in Leckagh Drive."