A Church of Ireland minister resigned as rector of Newry after he burnt two Royal British Legion flags.
The Reverend Kingsley Sutton said he "utterly regretted" his "inappropriate and unacceptable" decision to take down the legion standards hanging in St Patrick's and St Mary's churches in Newry.
The minister, who defied instructions of a senior bishop in removing the flags, had already been asked to step back from ministry amid the fallout from the episode.
But anger over the minister's actions grew yesterday when it was revealed that he had destroyed the flags so they could not be returned to the church.
This newspaper understands that the flags, which commemmorate soldiers who died in the two World Wars, were incinerated.
The Royal British Legion (RBL) has described the destruction of the standards as "unfortunate".
The Belfast Telegraph first revealed the developing revolt against the Rev Sutton at his churches St Patrick's and St Mary's in Newry earlier this month.
Rev Sutton's removal of two RBL flags was the final straw for many of his parishioners who had become disilluioned with his style in the 13 years since he became Rector of Newry.
They complained that he modernised services and last month gave a sermon in which he told Apprentice Boys that repentence should be done for those who signed the Ulster Covenant.
Parishioners claimed he barred the Royal Black Preceptory from using one of the churches, but this has been refuted by the Church of Ireland.
A parishioner said the removal of the flags caused hurt among many in the congregation who served in the security services in the past and because the adjoining churchyard has a lot of soldiers' graves in it. He said they had tried to go to the Bishop of Down and Dromore Harold Miller but claimed they got no response, so going public by speaking to the Belfast Telegraph was their last option.
Rev Sutton replaced the RBL standards at both St Mary's cathedral and the historic St Patrick's church with white flags featuring a red heart from the Global Day of Prayer event in the ground of the Stormont Estate in 2006.
He explained that his actions were to try and "make a break" from the past.
It was confirmed last night by a spokeswoman for the Church of Ireland that the standards were incinerated.
At the time the Rev Sutton declined to comment publicly.
However now following internal discussions within the Church of Ireland a profound apology was issued in his name yesterday morning, speaking of his deep regret at what he termed the "damage" he caused with "this inappropriate and unacceptable action".
Rev Sutton confessed that he not only removed the RBL standards but also destroyed them.
Bishop Miller has described the destruction of the flags as "very painful indeed".
Rev Sutton apologised to Bishop Miller, his parishioners, his select vestry, the RBL, the loyal orders and the Apprentice Boys.
"I also apologise to my family and friends for the difficult and serious situation that I have put them in. I commit myself to learning from my mistakes," he said. "My desire and heart has only ever been to make Jesus known and to draw as many people as possible to Him, to advance the hope of peace and love in this troubled land.
"As I got this so blatantly wrong with my actions, I feel I can do no other at this stage than to offer my resignation as rector of Newry."
This resignation was offered to Bishop Miller on Wednesday evening and was accepted on Thursday morning.
It is understood that the details of the resignation and exactly when it will apply from are still being worked out.
There was no response from the church manse at Glebe House in Newry last night when the Belfast Telegraph attempted to contact Rev Sutton, a former farmer from Co Wicklow.
He had been minister at St Mary's and St Patrick's in Newry since 2002.
Bishop Miller said he plans to meet with the RBL, Select Vestries and the Apprentice Boys to seek a way forward.
"We would like to thank all concerned for their helpfulness and graciousness," he added.
Brian Maguire, the RBL's Area Manager for Ireland, spoke of his regret that the standards had been destroyed but welcomed the apology from the Rev Sutton.
"This is a local issue between the parishioners and the Church," he said. "It is unfortunate that the Legion standards have been destroyed but I welcome the apology and I know that the local Legion members are looking to move forward."