A tricolour insulting a Cathlic murder victim was placed on top of a bonfire in Co Antrim last night.
The name of 15-year-old Catholic murder victim Michael McIlveen was on a flag due to be burned at the Eleventh night loyalist bonfire in Ahoghill.
The message said: "F*** Mickey Bo," the dead teenager's nickname.
Police and Sinn Fein North Antrim Assemblyman Philip McGuigan branded the display a disgrace.
Mr McGuigan said: "The family of this young man have gone through enough this year already without having to hear about these sectarian displays of hatred directed toward their son.
"How could these flags have been permitted to be put up in the Ballymena area?"
Michael was beaten to death by a gang which pursued him through Ballymena last May. His death sparked heightened community tensions and saw sectarian taunts posted on Internet site Bebo.com as well as death threats against two of five Ballymena teenagers charged with his murder.
A police spokesman said they had liaised with community representatives in an effort to have the flag at Ahoghill taken down.
"Police and others in Ballymena District Command Unit are working to reduce sectarianism in the community. This type of disgraceful display only undermines the good work that is being done."
Hundreds attended Michael's funeral and there have been appeals for calm as the marching season reaches its height today.
Co Antrim Orange Grand Master Robert McIlroy said: "Within the institution of Co Antrim we have a situation where we want tolerance and we want respect of each other's cultures and traditions.
"Certainly for the Orange Order in Co Antrim there's no place for sectarianism or bigotry."