A controversial police operation which saw a Troubles survivor arrested at a memorial event has created a nationalist crisis of confidence in policing, Michelle O’Neill has said.

Police Service of Northern Ireland Chief Constable Simon Byrne has apologised for the scenes that unfolded at the site of a loyalist massacre when officers intervened at an anniversary ceremony amid suspicions that the public gathering breached coronavirus regulations.

Mr Byrne announced on Saturday night that one officer has been suspended and another repositioned following Friday’s incident in Belfast’s Ormeau Road.

The actions have been taken pending the outcome of a Police Ombudsman investigation into the events.

Mark Sykes, who was shot several times in the 1992 massacre that claimed the lives of five people, was handcuffed and arrested in chaotic scenes captured on social media.

The fallout from the incident, and Mr Byrne’s subsequent response, has sparked a political row.

While Sinn Fein has dismissed the action against the officers as “token gestures”, unionists have queried the haste of the suspension, with Traditional Unionist Voice leader Jim Allister accusing Mr Byrne of “pandering and grovelling” to Sinn Fein.

Ms O’Neill said the approach adopted by officers was “crass, vulgar, insensitive and deliberate”.

The deputy First Minister declined to say if she retained confidence in Mr Byrne but she did say she was not calling on him to resign.

“If the Chief Constable wants to enjoy the confidence of the wider society then it is for him to demonstrate that he will hold people to account and let us all see that in action,” she told BBC Northern Ireland’s Sunday Politics show.

“He’s at the very top of the service, so if he’s going to bring about a new beginning to policing and if he’s going play his part then he must hold people to account and he must call out and challenge what appears to be an ethos and a culture within the PSNI to have a disproportionate approach to one section of society over and above the other.”

The incident was the latest in a series of controversies around the PSNI’s enforcement of Covid-19 rules in Northern Ireland.

They have faced criticism for not taking action when large crowds of mourners have gathered for funerals of former paramilitaries, while the ombudsman found officers acted in a discriminatory way in handing out fines to Black Lives Matters protesters last summer.

Earlier this week, Mr Byrne was again facing scrutiny after officers did not move in to make arrests when a large crowd of masked men congregated in east Belfast in an apparent paramilitary show of strength.

Ms O’Neill is to lead a party delegation to meet Mr Byrne on Monday.

She contrasted the scenes on the Ormeau Road with police’s failure to make arrests when they encountered the loyalist gang.

“I think that the direct contrast in policing is laid bare for all to see and I think anybody who considers all those things in the round would understand that there certainly is a crisis of confidence in policing among the nationalist community,” she said.

“There appears to be a double standard within the policing service, there appears to be an ethos or culture that turns a blind eye to UDA, UVF thugs on the street, but at the same time a disproportionate attempt to target nationalist communities.”

Mr Allister said bereaved families of other Troubles atrocities had not gathered in numbers to mark anniversaries during lockdown.

He questioned why police were facing criticism because they intervened over apparent regulation breaches and were met with a “disorderly response”.

Mr Allister highlighted that Ms O’Neill had been interviewed by police amid claims that she herself breached Covid regulations when she and other Sinn Fein leaders attended the funeral of republican Bobby Storey in west Belfast last June.

“I think of all the people who should have the least to say about policing Covid regulations it is Michelle O’Neill,” he said.

Mr Allister claimed Mr Byrne had “abdicated” policing on the day of the Storey funeral in June.

“So he is a Chief Constable who, from the unionist perspective, has lost a great deal of credibility and to then see him what many will say as pandering, grovelling to Sinn Fein demands on Saturday night put him in an even worse light,” he said.

Asked if Mr Byrne should go, Mr Allister replied: “I certainly have no confidence in him by virtue of his abdication of policing back in June.”

The DUP has questioned the pace of the action taken against the officers, describing it as “uncharacteristically swift”.

The party’s four Policing Board members said on Saturday night: “We cannot have trial by social media and we cannot have rushed announcements to suit some political agenda.”

After announcing the action against the two inexperienced officers, both of whom only joined the PSNI last July, Mr Byrne was asked whether he had considered his own position.

“I’m not a quitter, I took this job with my eyes open, determined to invest my time, my capital, working with a top team to deliver on my promise, which was visible, accessible and responsive community policing,” he said.

Five people, including a 15-year-old boy, were murdered and several others injured in February 1992 when Ulster Freedom Fighters (UFF) opened fire in the Sean Graham bookmakers shop on the Ormeau Road in February 1992.

The chief constable has said he is unable to de-arrest Mr Sykes as the matter now rests with prosecutors to decide whether prosecution is appropriate.

Police have said officers initially took action after witnessing a crowd of “between 30 to 40” attending an event.

Public gatherings of more than six people are currently prevented under Covid-19 lockdown regulations in Northern Ireland.

The Police Ombudsman continues to face calls from bereaved relatives of the bookmakers shop attack to publish a delayed investigation report into the 1992 murders, amid allegations of state collusion.