SDLP leader Colum Eastwood called on Stormont Finance Minister Conor Murphy to withdraw his slur against the late Paul Quinn in a passionate plea in the House of Commons on Wednesday.
e accused the Sinn Fein MLA of "lying" in an appearance on a BBC Spotlight programme where he claimed that Mr Quinn was involved in criminality and smuggling.
Mr Eastwood said if he or another SDLP representative was in Mr Murphy's position he would resign.
Paul Quinn was beaten to death by an IRA gang in a brutal attack at a farmhouse in Oram, Co Monaghan in October 2007. He had previously clashed with a local IRA commander's son.
Mr Murphy is expected to issue a written apology to the Quinn family on Wednesday evening.
"Paul was beaten to death by an IRA gang in 2007," said Mr Eastwood.
"They broke every single bone in his body, so much so, that his mother couldn't place rosary beads in his hands in his coffin.
"In the aftermath of that the now Finance Minister Conor Murphy said that Paul was linked to criminality, that was a lie."
Mr Eastwood appealed to Prime Minister Boris Johnson to support his stance.
"Will the Prime Minister agree with me that that lie and that Conor Murphy should retract that lie, publicly apologise and give any information he has to the PSNI about Paul's murder," the Foyle MP said.
Mr Johnson noted Mr Eastwood's passionate speech, but did not directly endorse his message.
"I think the whole house will hear the passion with which you spoke about that injustice and I can tell him that we will implement the Stormont House Agreement in such a way as to provide certainty for veterans and of course justice for victims as well," the PM replied.
The matter was also raised in the House of Commons by DUP MP Paul Girvan who said if Mr Murphy wanted to "ensure stable government in NI" and community confidence he should tell whatever he knows about the murder to the PSNI and An Garda Siochana.
Secretary of State Julian Smith condemned the "horrendous" murder and urged anyone with information to contact police.
Speaking to the Irish Independent on Wednesday Mr Eastwood called for the Finance Minister to stand down.
“If I was Conor Murphy I would resign. The way this has been handled is astonishing, the callousness of Sinn Fein is astonishing," the Foyle MP said.
“If it was the SDLP he would be gone."
The situation was addressed at a meeting of Stormont's Finance Committee on Wednesday afternoon. Mr Murphy was not scheduled to attend.
Committee chair Steve Aiken opening the meeting with remarks nothing the "brave words of Breege Quinn and the failure of our Finance Minister to apologise on television or take his information to the PSNI or Garda".
The UUP leader said he believed the situation had on impact on confidence in the institutions at Stormont.
TUV leader Jim Allister said that Mr Murphy's actions over the matter confirmed his view that he was "utterly unfit for office".
Mr Quinn's mother, Breege, has spent the last 13 years asking Mr Murphy to withdraw his comments in an attempt to clear her son's name.
Sinn Fein has always denied that the IRA were involved in the murder.
Mr Murphy and Sinn Fein President Mary Lou McDonald claimed earlier this week that Mr Murphy never made the comments, but were forced to change tact after the Spotlight footage emerged.
In the aftermath Mrs McDonald said that Mr Murphy would be withdrawing his comments, but the Stormont Finance Minister has yet to do so.
The Sinn Fein leader said that she would not be sacking the former IRA man or asking him to stop down over the scandal.
"Conor has clarified the fact that he is withdrawing his statement, comments he made over a decade ago and he has apologised for them," she said.
Sinn Fein has been contacted in relation to this story.