The Dandy, home over the past 60 years to characters such as Desperate Dan and Bananaman, has been accused of deliberately trying to make the Irish look stupid.
Those levelling the accusations say it is particularly unpleasant because of the age of the comic's readers.
The offending character, O'Diddle, from fictitious Rathprune, sparked controversy when, in a recent edition of the comic, he was featured trying to grow a black-pudding tree. His catchphrase, which is regularly used, is: "Sure 'ting."
Telephone lines to a Dublin radio show were jammed with listeners calling in to complain. One farmer called the Joe Duffy Livelive show and said the comic's racism was sinister.
But staff at the Dundee-based Dandy were defiant yesterday, accusing detractors of political correctness and refusing to spike the leprechaun or alter his character.
The Dandy's editor, Morris Heggie, devised O'Diddle during a visit to an Irish comic fair. He said: "In the story Fiddle O'Diddle from Rathprune is the smartest leprechaun in Ireland and most of the stories involve people trying to catch him for a crock of gold.
"I think it was the black-pudding story that has caused all this fuss. This is all madcap stuff. Both the heroes and villains in the story are Irish.
"We are portrayed as tight-fisted, kilt-wearing, caber- tossing Scots, and it's the same with the English and the Welsh. No one is safe from being lampooned on our pages."
David Donaldson, managing director of the comic's publisher, DC Thomson, said readers were aware of the difference between the real world and life portrayed in the Dandy.
"Look at Father Ted. Nobody seriously believes all Irish priests are like that," said Mr Donaldson. He added: "Heaven help us if we have to water down any more. We have had minority pressure groups complaining about this and that."
Like many comics, the Dandy - first published in 1937 and still selling 100,000 copies a week - has had to cut down on violence, ruling out traditional scenes of punch-ups and corporal punishment.