"I, I, IRA! I, I, IRA!" shouted the youths as the bandsmen belted out republican tunes around the anti-internment bonfire in Ballymena. "We're here to defy the Brits, the cops and Sinn Féin," said a woman, as the flames lit up the sky on the nationalist Dunclug estate.

"Loyalists have band parades in this town every weekend in summer but we're not meant to have one bonfire a year to commemorate the wrongful imprisonment of innocent men. We're second-class citizens," said another .

"Sinn Féin shouldn't have tried to stop this bonfire," said a 28-year-old man. "They said it was organised by thugs and hoods. Did it just stop being republican when Sinn Féin stopped organising it and others gained control?"

Around 250 people gathered last Friday for the bonfire Ballymena tried to ban. Someone put a Sinn Féin recruitment advertisement on the bonfire. Union Jacks and Northern Ireland flags topped the blazing pile. Dissident graffiti and posters increasingly appear on Dunclug walls.

"Get the Brits out! Get the Brits out!" youths shouted. Many were drinking beer. Two Police Service of Northern Ireland (PSNI) officers on bicycles observed the scene nervously from 400 yards away. It was surreal.

For nights, local youths had sat guarding the bonfire from destruction by loyalists. But bonfire material was removed from the site last week in a joint PSNI-council operation, apparently supported by Sinn Féin.

In a confrontation with local youths, Sinn Féin Assembly member Daithi McKay and councillor Padraig McShane were assaulted. Ciaran McGill (21) has been charged with assault.

A well-respected Protestant community activist was wrongly implicated in the bonfire's removal. His home was attacked and he has since left Dunclug.

The 20ft bonfire is small by Northern standards. "We've only had a few days to gather more wood and we'd to hide it in case the Shinners got it," said one youth. Dunclug is depressing. Many houses are blocked up. Unemployment is high.

Residents say most Ballymena recreational facilities – the cinema, leisure centre and Superbowl – are in the Protestant part of town. "The bonfire is all young people here have," says Paul O'Neill (25).

"I'm not pro-bonfire – it's something more part of loyalist than nationalist culture – but I'm angry when thousands of pounds of funding go to Eleventh of July loyalist bonfires in Ballymena, and we're completely neglected. Sectarianism is rife here."

In 2006, Catholic teenager Michael McIlveen was beaten to death by loyalists in Ballymena. "On his anniversary three months ago, I was set upon by four carloads of loyalists as I walked home," says O'Neill. "'Get the Fenian bastard!' they yelled. I was beaten with baseball bats and stabbed in the head."

Maggie, a middle-aged Dunclug resident, says: "Loyalist bands play the Sash near where Michael McIlveen was murdered, yet we're not allowed a bonfire?"

Sinn Féin councillor Padraig McShane, who is anti-bonfire, chairs the Dunclug residents' association. Two other association members, who asked not to be named, attended the bonfire.

One said: "McShane doesn't live in Dunclug, but 30 miles away in Ballycastle. That shows his interest in our community. Sinn Féin promises us everything but delivers nothing. Dunclug received £5m funding.

"So far we've got a 'welcome to Dunclug' sign, no job creation, not even a park for the kids. The place is a slum. I'm delighted the bonfire is going ahead – it's two fingers to Sinn Féin."

In other nationalist areas, paramilitary emblems are disappearing. A new mural has been painted in Dunclug: a masked gunman beside a 'PSNI keep out' sign.