Chief Constable Jon Boutcher has been described as “naive” after he said the loyal order linked parading tradition - which excludes Catholics - should be “celebrated.”
Mr Boutcher made the controversial remarks at a meeting of the Policing Board on Thursday.
The parading tradition is mainly associated with the loyal orders, which include the Orange Order, Apprentice Boys and Royal Black Institution - none of which allow Catholics to become members.
There has been controversy in the past with Orange Order banners glorifying loyalist killers, while marching bands regularly play sectarian tunes.
Attempts have been made to improve the image of Orange parades in recent years, including the launch of Orangefest in 2007, which aimed to present the annual Twelfth of July events as inclusive and which could attract tourists.
Mr Boutcher’s comments came during an address to board members about recent anti-migrant violence in Belfast and trouble in Derry after an Apprentice Boys parade in the city last month.
The chief constable was in the city during the annual ‘Relief of Derry’ parade, which attracts Apprentice Boys from across the north.
After the parade dozens of people were involved in the disorder near the Bogside during which petrol bombs were hurled, including one by a young child, at police Land Rovers.
Mr Butcher told board members that during his visit to the city he “witnessed the super, family orientated day of parades, events that were disgracefully hijacked and marred by scenes of violence and disorder”.
The annual event has been contentious in the past and was the focus of a stand-off between nationalists and members of the Apprentice Boys in the 1990s.
Despite a deal being eventually agreed, tensions continue, including last when a loyalist band wore Parachute Regiment insignia on their uniform bearing the letter ‘F’ - a reference to a former British soldier known as ‘Soldier F’ who has been charged with murdering two people, and five attempted murders, on Bloody Sunday 1972.
In August 1969 three days of nationalist rioting erupted in Derry, known as the Battle of the Bogside, after an Apprentice Boys parade through the city.
Many people look to this period as the start of the Troubles.
During Thursday’s meeting, Mr Boutcher claimed parading could “bring communities together.”
“We have to decide what sort of society we want in Northern Ireland,” he said.
“The history of parades and tradition in Northern Ireland should be something that we celebrate, it should be a catalyst for bringing communities together, not separating them.
“It should be something that’s celebrated worldwide, it should bring in enormous tourism.
“And these events are something that prevent all of that from happening.”
Derry based SDLP and Policing Board member Mark H Durkan, who attended Thursday’s meeting, believes Mr Boutcher’s assessment is wrong.
“I think he probably was a bit naive to think these things are something that everyone is going to enjoy and celebrate,” he said.
“While it has its place in someone’s culture and the way that has been exercised, I suppose in the past, is far from isolated incidents, is far from conciliatory in nature.”
Mr Durkan said that footfall at a major Derry shopping centre was significantly down the day Apprentice Boys marched in Derry.
“It’s certainly no beneficial to our local economy,” he added.
In the past nationalists have strongly resisted allowing loyal order parades through mainly Catholic districts.
This includes the Drumcree dispute when nationalists blocked the return route of an Orange Order parade along the nationalist Garvaghy Road in Portadown in July 1995.
Several sectarian murders were linked to the dispute including that of Catholic taxi driver Michael McGoldrick (31), who was shot by the UVF outside Lurgan in 1996.
An arson attack also carried out by the UVF also claimed the lives of Catholic schoolboys Richard (10), Mark (9) and Jason Quinn (8) after their Co Antrim home in July 1998 – leading to the parade being banned permanently.
St Patrick’s Catholic Church in Belfast was also the focus of a stand-off between the loyal orders and local nationalists after a loyalist band was filmed playing ‘The Famine Song’ while marching in circles outside the historic place of worship in 2012.
The song, which contains anti-Irish lyrics and is sung to the air of the Beach Boys hit Sloop John B, was branded racist by a Scottish court in 2009.