Liberal MP Craig Kelly is alleged to have conveyed Prime Minister Tony Abbott's best wishes at a community event in Sydney commemorating April 10, or the foundation date of a pro-Nazi Croatian government in the 1940s.
In a written statement, Serbian Ambassador Mr Miroljub Petrovic said the Republic of Serbia strongly condemned the commemoration of "creating so-called Independent State of Croatia and participation of Australian officials at such events".
Related: Craig Kelly's office responds
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"It is discouraging to know that still persisting and acting some organizations and individuals which so brutally abuse freedom and democracy in Australia, such as ones who celebrate the day when fascist so-called Independent State of Croatia has been created, whose criminal character is undeniable," the statement read.
"Even more, it is the tragic fact that such organizations and individuals, in their morally monstrous glorification of fascism and nazism, are trying to involve people from the current political scene in Australia, even the Prime Minister itself."
"Such events are giving rise to deep anxiety and serious concern in the Serbian community in Australia!
"Republic of Serbia strongly condemns any occurrence of glorifying fascistic ghosts of the past, and strongly believes that there can be no justification or excuse for tolerating or - even worse - supporting such activities, no matter who are the organizers or participants!"
The event, held last week at the Croatian club ‘Sydney’ in Punchbowl, was to commemorate the date of establishment of the so-called Independent State of Croatia.
During the Second World War the so-called Independent State of Croatia was affiliated with Fascist Italy and Nazi Germany - adopting their policies, including the deportation and killing of Jews and other non-Croats.
Liberal MP Craig Kelly attended the Sydney meeting, and the Croatian government is concerned about media reports that he conveyed Prime Minister Tony Abbott's best wishes at the event.
Mr Kelly reportedly attended the event on behalf of the Parliamentary Secretary for Multicultural Affairs, Senator Concetta Fierravanti-Welles.
Related: Croatian PM speaks to Kristina Kukolja during his Australian visit in March
