THE PSNI has refused to address claims that officers urged a council to fund a loyalist bonfire which was at the centre of a hate crime investigation.
The Irish News revealed last week that police endorsed public funding for the controversial bonfire at Ballycraigy in Antrim.
The eleventh night bonfire made headlines around the world last year for its sectarian displays including an effigy of a hanged Gerry Adams.
The huge pyre, which also had a racist banner and was covered in tricolours, has been the subject of a hate crime probe by police.
Bonfire groups in the Antrim area can apply for council funding of up to £3,000 for related events, with some money usually provided up front and the remainder afterwards.
Payments are approved by a committee that includes councillors, community representatives and PSNI officers.
Committee minutes show funding was given after police pressed the committee last year to approve payments for Ballycraigy.
The minutes read: "Both PSNI officers present were appreciative and supportive of the efforts of local residents leading up to and post event, urging council support and indicating that the group's relationship with the PSNI had improved enormously in the last year and that they were actively continuing to co-operate with the police."
The Ballycraigy bonfire caused uproar again this year when effigies of Sinn Féin's Gerry Adams and Martin McGuinness and hunger striker Bobby Sands in a coffin were placed on the pyre.
Police confirmed that this year's display of effigies is also being treated as a sectarian hate incident and appealed for information.
However, when asked to respond to concerns that police encouraged funding for the bonfire, the PSNI would only say: "The decision to provide funding to any bonfire group is a matter for the local council."
Sinn Féin councillor Anne Marie Logue claimed the response "calls into question the credibility of the police in tackling race, homophobic and sectarian hate crimes".
A rainbow flag representing the gay community was also placed on the bonfire last year.
The PSNI confirmed that officers questioned a 19-year-old man on suspicion of displaying material to incite hatred following last year's Ballycraigy bonfire.
"It was reported to police that materials of a racist, homophobic and sectarian nature were displayed on the bonfire in Ballycraigy, Antrim," a spokesman said.
"Police attended the bonfire and made attempts to have the offending material removed. The bonfire was subsequently burnt and all materials destroyed."
A Public Prosecution Service (PPS) spokeswoman confirmed it has received a file from police.
"The PPS can confirm it received a file from the PSNI in relation to allegations connected to activity at a bonfire in Antrim on July 11 2014," she said.
"That file was received last month and is currently under active consideration. A number of matters arising from its content have been referred back to the PSNI for further investigation."