The Scottish Police Federation has called for an end to Old Firm "madness" after trouble flared once again at last night's match.
Thirty-four arrests were made as Celtic beat Rangers 1-0 in the Scottish Cup fifth-round replay.
An SPL match at Celtic Park last month led to 16 arrests within the ground and more than 200 in the Strathclyde force area.
SPF chairman Les Gray said police no longer had the budget to deal with match-related unrest, and he called for the derby to be played behind closed doors or banned altogether.
Mr Gray said: "We simply don't have the money and resources to do this.
"Everyone involved needs to sit down and look at this. Something has to give. This madness cannot go on."
Strathclyde Police said last night's arrests were for a variety of sectarian, racial and breach of the peace offences.
Police had warned they would crack down on drink-fuelled violence linked to the match after trouble flared in the wake of the last Old Firm game.
On February 20, more than 229 people were arrested in the force area and in some cases prisoners were said to have been driven 50 miles as police cells filled up.
Mr Gray said consideration should be given to playing the matches behind closed doors or restricting the television coverage.
Speaking after the latest clash, which saw Rangers assistant manager Ally McCoist and Celtic manager Neil Lennon involved in angry scenes, he said: "What happens on the pitch is reproduced throughout Scotland, on the streets, in pubs, in homes.
"You cannot justify it. It can't keep on going."
Justice Secretary Kenny MacAskill said the violence has more to do with alcohol and is less about football.
He said yesterday: "There is a deep-rooted and unacceptable social issue involved - which has a great deal to do with Scotland's damaging relationship with alcohol, and little to do with football.
"The issue is far wider than clubs and the game. It is about a culture of violence fuelled by alcohol.
"By all means drink responsibly and safely but do not get drunk, get violent, assault your partner or anyone else - the message is that any such conduct is utterly shameful and unacceptable."
Strathclyde Police Assistant Chief Constable Campbell Corrigan spoke to Scotland's First Minister Alex Salmond following last night's match and has written to his Government to press for a "frank and open" discussion between all the parties involved.
An SPL match on February 20 at Celtic Park led to 16 arrests in the ground and more than 229 in the area.
In some cases prisoners were said to have been driven 50 miles as police cells filled up.
Mr Corrigan said today: "We fully support the clubs and the football authorities in the work that they are doing in addressing many of the problems that affect our society.
"However, the events of the past few weeks have shown that there is much that needs to be done.
"It is the responsibility of us all, not just football, to do everything we can to reduce the violence and end the sectarianism that, sadly, is still ruining lives and is an embarrassment to our country."
Plans are being made for a summit of football chiefs, politicians and police officers, likely to be held in Edinburgh next week, to stop the situation spiralling further.Reuse content