A woman sitting on the crisis-hit Parades Commission has family links to the loyal orders her father and uncles are members.
The news emerged after the Court of Appeal upheld Secretary of State Peter Hain's appointment of two Portadown Orangemen to the body David Burrows and Donald MacKay after an earlier ruling deemed the pair's selection unlawful.
The Garvaghy Road Residents Coalition may now mount another legal challenge at Britain's highest court, the House of Lords.
But the appointment of independent Parades Commission member Alison Scott-McKinley could now also come under scrutiny through the courts putting the credibility of the body under further pressure and raising more questions about Mr Hain's role in the issue.
The Irish News yesterday (Friday) viewed the declaration and register of interests form completed by Mrs Scott-McKinley, a lay magistrate and member of Cookstown District Policing Partnership.
All members of the commission were obliged to list any connections with voluntary or other bodies contracting with the body, as well as "declare any relationship which could be deemed to influence your views or any matter which may be discussed by the commission".
Mrs Scott-McKinley wrote: "I have family members who are members of the loyal orders."
It is understood her father and uncles are members.
Sinn Féin assembly member John O'Dowd last night said nationalist confidence in the commission had been "completely undermined".
"Peter Hain must think that he can take the wider nationalist and republican community for fools," he said.
"We already knew of the Orange Order links to both David Burrows and Don MacKay... Now it has emerged that another of Peter Hain's appointees, Alison Scott-McKinley, is closely linked to the Orange Order through family members.
"As we approach into the marching season Peter Hain needs to reflect long and hard about the approach he has adopted and the effects which this has had. He now needs to move rapidly to restore public confidence in the commission."
Controversy erupted over the make-up of the commission when it emerged that SDLP assembly member Dolores Kelly was named as a referee without her consent on Donald MacKay's application form. Mr MacKay later quit the body.
Mrs Scott-McKinley could not be contacted last night and the Parades Commission declined to comment.
Last night the secretary of state stood by the appointment of Mrs Scott-McKinley.
"The Parades Commission has the full support of the secretary of state," an NIO spokeswoman said.
"The commission deserves the opportunity to get on with the important role that it undertakes on behalf of the people on Northern Ireland."