Neil Lennon admits his "heart sank" when he saw banners which are now subject to disciplinary action displayed at Celtic's Champions League meeting with AC Milan at Parkhead.
Celtic face a UEFA fine over the display which featured images of Scottish historical figure William Wallace and IRA hunger striker Bobby Sands along with a set of lyrics.
The words on the other banners, which were displayed in and around the section housed by the Green Brigade supports group read: 'The terrorist or the dreamer, the savage or the brave, depends whose vote you're trying to catch or whose face you're trying to save'.
The display pertained to the Green Brigade's on-going disgruntlement at the Offensive Behaviour at Football Act which they claim deems "expressions of Irish identity, culture and politics" illegal.
UEFA announced its control and disciplinary body would deal with the case on 11 December after confirming proceedings had been opened for "an incident of a non-sporting nature (illicit banner)".
Ahead of the Scottish Cup fourth-round clash against Hearts at Tynecastle on Sunday, the Celtic boss said: "I quite like going out before the game and soaking up the atmosphere because you never know when you have that opportunity again.
"It is not guaranteed you will play Champions League every year, and my heart sank a little bit I have to say.
"I think there were a lot of other areas of the stadium where the supporters were scratching their heads and trying to understand the reasoning behind it.
"Since then we know the reasons behind it but it certainly wasn't the time or place for a display like that.
"It should have been a celebration rather than people having a grumble about something.
"When I came in here I tried to bring the club together again and I think we have done that, certainly with the performances over the last three or four years, so it is disappointing that some people want to bring cracks to the club.
"I don't know what you can do.
"It is not welcome within the stadium. We understand that they maybe have legitimate complaints over some of the laws brought in but Celtic Park is not the place to bring banners in like that.
"We are a football club at the end of the day, multi-cultural as well, so I think we need to put a stop to it."