Graeme Souness had branded Celtic “the unacceptable face of football in Scotland” following the anti-monarch actions of a section of their support.
The former Rangers boss also believes the controversy will put off potential sponsors.
Souness hit out at the Hoops fans who chanted “if you hate the Royal Family clap your hands” and unveiled banners with the same message during a minute’s applause for Her Majesty before Sunday’s Scottish Premiership defeat to St Mirren, reports the Daily Record.
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The former Liverpool captain and talkSPORT pundit said: “Whatever I say on this people will say they expect that because I was employed by Glasgow Rangers and I’m a Rangers fan. But you try to stand back a bit and the eyes of the world were on this country in the last 10 days.
"Celtic now have a major problem because if you’re a major company looking to sponsor a team in Britain or Scotland, would you consider Celtic any more?
“Not at all. And by the decision-makers at Celtic being silent on this matter they’re compounding the problem.
"This is not just a talking point of Scotland - it’s a talking point throughout the world. They have shot themselves in the foot big time.
"It is a minority who are guilty of this but also a minority that are damaging the brand of Celtic - synonymous with being the first British team to win the European Cup, great success and an absolute institution in Scotland - beyond belief.
“If you’re a Rangers fan it’s happy days. They want the silence to continue. They’re (Celtic) shooting themselves in the foot. They should have been out days ago condemning this. And for everyone who doesn’t like Celtic the music is brilliant and want it to keep going.
“In the eyes of the world, Celtic are now the unacceptable face of football in Scotland due to a minority of fans. The eyes of the world were on Great Britain and I have to stress it’s a minority. I have pals who are Celtic fans and are condemning this so why aren’t the club?”
Show host Jim White added: “We have asked Celtic not once but twice if they’re going to say anything about it but they haven’t even responded.”
And fellow pundit Simon Jordan added: “You can’t legislate for the hearts and minds of some of your football fans that come and support your team but as a club you can exhibit a better code of conduct than Celtic have done which is come out and say ‘we think this is poor, we don’t support their views’.
“I’m a bit perplexed as to why Celtic wouldn’t want to do that. We know it’s steeped in historic feelings about the monarchy but come on.”
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