Mid Ulster District Council say they have "initiated our complaints process" after a complaint was received from a loyalist group about the erection of the Christmas tree in Magherafelt.
The British Truth Forum handed in letters to the council and the local PSNI claiming an equality impact assessment(EQIA) had not been carried out and the tree could be offensive to non-Christians.
The Forum was behind the unsuccessful campaign to keep the Union flag pole in the centre of Magherafelt at the start of the year.
The Christmas tree at the Diamond is scheduled to be switched on tomorrow night accompanied by a fireworks display.
Forum chairman William Lennox said in the letter that the tree should be removed as others could find it offensive to their beliefs.
"The council are well aware the town centre must remain neutral at all times," he stresses in the letter.
Mr Lennox was unavailable for comment today, but told the Irish News last night that the Forum are asking the council to relocate the tree.
“We are not saying we don’t want a Christmas tree but there are people offended by Christmas, who don’t celebrate Christmas," he said.
A council spokesperson said: "We can confirm that a complaint has been received in relation to the Christmas Tree erected in Magherafelt Town Centre this week, with a query about whether there was an EQIA carried out for same. We have initiated our complaints process and it will be dealt with in due course."
The PSNI said it was a matter for the council.