Given a set S of n locally aligned sequences, it is a needed prerequisite to partition it into groups of very similar sequences to facilitate subsequent computations, such as the generation of a phylogenetic tree. This article introduces a new method of clustering which partitions S into subsets such that the overlap of each pair of sequences within a subset is at least a given percentage c of the lengths of the two sequences. We show that this problem can be reduced to finding all maximal cliques in a special kind of max-tolerance graph which we call a c-max-tolerance graph. Previously we have shown that finding all maximal cliques in general max-tolerance graphs can be done efficiently in O(n3 + out). Here, using a new kind of sweep-line algorithm, we show that the restriction to c-max-tolerance graphs yields a better runtime of O(n2 log n + out). Furthermore, we present another algorithm which is much easier to implement, and though theoretically slower than the first one, is still...