Scotland's only openly transgender councillor has been suspended for two months over derogatory online remarks.
The Standards Commission for Scotland said a remark by Gregor Murray "went far beyond what is acceptable."
The panel said it accepted that the councillor had suffered from "unwarranted bullying and abuse."
The Dundee councillor had earlier resigned from the SNP, claiming it had a "major institutional problem with transphobia."
It means the SNP now holds 14 of the council's 29 seats, but retains an administration with support from independent councillor Ian Borthwick.
The standards commission said the councillor's use of a "derogatory word in a public forum" had been "highly offensive and inappropriate."
It said the councillor had also referred to a member of the public as a "TERF" (Trans Exclusionary Radical Feminist), subsequently describing "TERFs" as "scum", and "hateful and vile."
Councillor Murray identifies as non-binary and prefers to be referred to by the "they" pronoun, rather than "he" or "she".
They said they were "severely disappointed" in the panel's decision.
Councillor Murray said: "I accept that it is not appropriate for me to swear - I have apologised for this on numerous occasions and have already accepted sanctions for doing so.
"I am also extremely worried by the precedent that this has set that TERF is an offensive or abusive term."
The panel's chairwoman Ashleigh Dunn said: "Councillors have a duty under the code to treat members of the public with courtesy and respect and cannot, therefore, indulge in offensive personal abuse.
"While politicians have an enhanced right of freedom of expression, they cannot, simply indulge in offensive behaviour.
"In this case, the panel's opinion was that Councillor Murray's conduct, in referring to a member of the public in an offensive manner and in making a highly inappropriate comment online, went well beyond that which is acceptable."
Responding to the councillor's accusation over alleged transphobia, an SNP spokesman said: "We're sorry that Gregor feels this way, but cannot agree with the claims being made.
"The SNP has a proud record in advancing Scotland's reputation as one of the most progressive countries in Europe in terms of lesbian, gay, bisexual, transgender and intersex equality."