Sinn Féin has suspended West Tyrone MP Barry McElduff from all party activity for three months.
He was called to a party meeting on Monday after he was widely criticised for posting a video on social media with a Kingsmill loaf on his head on the anniversary of the 1976 Kingsmill massacre.
He had insisted it was not meant as a reference to the republican murders of 10 Protestant workmen in 1976.
Sinn Féin Stormont leader Michelle O'Neill said afterwards: “I made it very clear to Barry that his tweet was ill-judged and that his tweet was indefensible and that it’s caused hurt and pain to the Kingsmill families.
“I also made it clear that his tweet was not of a standard that we would expect from Sinn Féin representatives.
“Barry has again today rehearsed his apology, his unreserved apology to those people that he has offended and to those victims of Kingsmill. He accepts that it was an ill-judged tweet and he accepts the hurt and pain it has caused.
“I don’t believe that Barry’s actions were malicious or were intended to cause the hurt and pain which they did, however given the seriousness of the issue I have suspended Barry for a period of three months from the party and Barry accepts that as an appropriate response in relation to the tweet activity."
In a statement, Mr McElduff said: "Although I genuinely meant no offence, I accept that my actions were ill-judged and, while unintended, caused deep and unnecessary hurt and pain to the Kingsmill families.
"I apologise unreservedly for this.
"In recognising the serious consequences of my actions, I fully accept the party’s decision to suspend me from all party activity for a period of three months."
DUP leader Arlene Foster described Mr McElduff’s suspension as “quite pathetic”, adding Sinn Féin’s “respect agenda is in tatters”.
She had been meeting with the community in Bessbrook, where most of the Kingsmill victims were from.
“Here we have an organisation which accepts the guilt of the individual but then does absolutely nothing about it,” she said.
“Because of course, Barry McElduff doesn’t go to Westminster so it’s going to have no impact in relation to his representative role and of course what he should have done is resign.”
The sole survivor of the atrocity, Alan Black, also called for the politician's resignation.
"I watched all my friends being murdered. A 19-year-old apprentice crying for his mother. And then to watch on Friday, a man standing and mocking their deaths - if he was a man of principle he would walk," he told UTV.
"He is a very astute, clever politician. If he didn't know that the 5 January marked the Kingsmill massacre, it's beyond me. If Sinn Féin want to circle their wagons around him to protect him, well then that's their business."
REACTION: Kingsmill families in Bessbrook: