Labour has suspended a councillor over a social media post saying "Hitler had the right idea" about travellers.
The "dehumanising" comment was reportedly sent from the Facebook page of Cllr Bob Murray, of Prestatyn, in Denbighshire.
Images online appear to show a comment reading: "Hitler had the right idea, anyone hot (sic) any gas canisters?" sent from his account.
North Wales Police said it is investigating the incident as an "alleged hate crime".
Mr Murray, whose Facebook page now appears to be deleted, said he "absolutely categorically denies writing the comment".
The remarks were reportedly made on a discussion about a group of travellers posted by another councillor.
Labour MP Chris Ruane, whose Vale of Clwyd constituency includes Prestatyn, said he was "appalled" and would ensure a "full investigation is carried out".
He wrote on Twitter: "This kind of dehumanising language is utterly unacceptable and incompatible with Labour Party values and our shared values as a tolerant society."
A Labour Party spokesman said: "The Labour Party takes complaints about discriminatory and threatening language extremely seriously, which are fully investigated in line with our rules and procedures and any appropriate disciplinary action is taken.
"We can't comment on individual cases."
Cllr Murray will sit as an independent while he is suspended from Labour. He told ITV News he will be co-operating with the investigations.
A Denbighshire Council spokesman said: "The matter was referred to the Council and we have since referred it to the Public Services Ombudsman for Wales for consideration."