The bonfire in Edgarstown was set on fire at around midnight with firefighters tasked to the scene to quell the blaze.
It comes days after a bandsman was attacked in Woodhouse Street in Portadown in the early hours of Sunday morning after a parade.
Local Unionist politicians and the bonfire builders called for calm following the incident last night.
The bonfire builders have vowed to rebuild after last night’s attack.
Sinn Féin described the incident as ‘reckless and irresponsible’ and also called for elected representatives and community leaders to help reduce tensions.
Plea for calm from local councillor
DUP Cllr Darryn Causby said setting the bonfire alight was ‘an attempt to raise tensions’.
He said: “Sometime around Midnight Edgarstown Bonfire was set alight by individuals who made their way from the Obins Street area.
“This is no doubt an attempt to raise tensions and shows the level of intolerance that exists in some quarters for Unionist/Loyalist traditions.
“I wholeheartedly condemn this attack not only because it’s an attempt to raise tension but because it put the community at risk.
“As we approach the bonfire season I appeal for calm and restraint in the face of blatant provocation.
“I have no doubt that the malicious burning of this fire will only ensure that there is a greater unity within the Unionist/Loyalist community!
“It is now time for all political leaders to condemn this act and appeal for calm.”
What the MP said
Upper Bann MP Carla Lockhart said: “Last night Loyalist Edgarstown Bonfire was burnt to the ground in a blatant sectarian attack. I wholeheartedly condemn this attack and call on the PSNI to fully investigate this incident. I will be meeting the PSNI and the builders today.
“We know this is an attempt to goad the loyalist community into retaliation and to scupper our rich culture. I know that the Edgarstown people will not be deterred and it will be rebuilt within days.
“Thank you to the Northern Ireland Fire Service for their swift action.”
What the bonfire builders said
A spokesperson for Loyalist Edgarstown Bonfire which built the bonfire said: “We outright condemn the latest sectarian attack on our community from local Nationalists, who are taking their lead from their politicians who spend the entire summer demonising and criticising us.
“Is it any wonder there are extremists who pick up on their hatred and act upon it?
“We appeal for calm heads, with efforts placed in re-building the fire from the ashes in defiance of those driven by hatred.
“It does however raise questions about the intentions of Irish nationalists and their leadership, who seem content to up the ante and antagonise unionists in this way.
“It also raises serious questions about plans for the interface. The local community will not be left to defend themselves and exposed to this sort of attack.
“We await strong condemnation and leadership from Nationalist polititicians who always have a lot to say for themselves. Their silence on this hate crime will be deafening.”
What Sinn Féin said
Sinn Féin councillor Paul Duffy said elected representatives and community leaders must work together to reduce tensions.
Cllr Duffy said: “No one should take any action which puts lives and property at risk.
“There is a responsibility on all elected representatives and community leaders to do all in our power to reduce community tensions.
“The cause of the fire has yet to be established, however, if this was a deliberate attack it was reckless and irresponsible.
“There is an onus on all of us to ensure that the responses to incidents like these do not raise tensions or point the finger at whole communities which could in turn put others at risk.”