Unionist support for peace process agreements in Northern Ireland is “falling away” due to the Brexit protocol, Sir Jeffrey Donaldson has warned.

The DUP leader offered the assessment after the Progressive Unionist Party (PUP) said it could no longer support the 1998 Good Friday/Belfast agreement because in its opinion the Irish Sea border had undermined its central plank – the principle of consent.

Sir Jeffrey also condemned recent outbreaks of violence in certain loyalist communities, including the hijacking and burning of two buses – incidents that have been linked to protests against the protocol.

On Monday, the PUP, which is politically aligned to the paramilitary Ulster Volunteer Force, said there was no basis for unionists to retain support for the peace deal that established the power-sharing institutions at Stormont.

Reacting to the move, Sir Jeffrey said: “The PUP are very clear – they’re not wanting people to go back to violence and they have condemned violence on our streets.

“But it is a matter of concern that support for the agreements and political institutions is falling away, and not least within unionism itself.

“I’ve been warning about this now and warning that this is one of the consequences of the protocol, because the protocol upsets the very delicate constitutional balance that is at the heart of the agreement, it undermines our relationship with the rest of the United Kingdom in a way that is unacceptable to unionists.

“Let’s not lose sight of the fact there isn’t a single unionist elected representative that supports this protocol.

“So, in a way, I understand where the PUP are coming from. But I want to get to a place where we put this right, where we get the political stability that we need.”

Sir Jeffrey also accused Dublin and Brussels of engaging in “megaphone diplomacy” over the potential of a trade war with the UK.

He said comments from the Irish Government and the EU around the prospect of retaliatory action if the UK suspends the protocol – potentially in the form of terminating the Trade and Cooperation Agreement – were causing “harm and damage”, and ratcheting up tensions.

He branded “disgraceful” a comment attributed to an unnamed EU diplomat quoted in the Daily Telegraph who said the EU was “ready for peace but prepared for war”.

The phrase has particular connotations in Northern Ireland as it was a slogan used by loyalist paramilitaries during the peace process to sum up their attitude to the political agreements. A well-known mural on a loyalist estate in north Belfast still bears the message.

The Ulster Unionist Party has also condemned the unattributed remark and UUP MLA Mike Nesbitt asked Stormont deputy First Minister Michelle O’Neill to join that condemnation during Assembly question time on Monday.

“Can I say that anybody who holds public office needs to be very careful in terms of the language which they use,” the Sinn Fein vice president replied.

“I note the comment that the member’s referring to, it’s not attributed to anybody so I don’t know where it’s coming from, but language of that nature isn’t appropriate or in any shape or form.”

Sir Jeffrey expressed doubt the EU would risk the trade deal, given its reliance on UK consumers.

“The EU does a lot of trade with the United Kingdom,” he said.

“Germany, the biggest trading nation in the EU, the United Kingdom is its biggest market in Europe, it’s the second biggest market for Germany in the whole world.

“Does anyone seriously believe that the Germans want to open a trade war with the United Kingdom? That’s not the answer here.

“The answer is to sit around the table and agree a solution. If the EU can’t do that, if the EU prefers instead to choose rhetoric, to choose a trade war over the need to protect the political process in Northern Ireland, then I’m sad about that.

“But it means the UK Government then must take decisive action to restore Northern Ireland’s place within the UK internal market and respect what the Belfast Agreement says – that Northern Ireland remains an integral part of the United Kingdom, unless the people of Northern Ireland decide otherwise.”