"I will sometimes retweet something just because it's interesting or controversial. So I hope you'll bear that in mind," he said. "Retweets are certainly not endorsement or agreeing. It's more for an observation of what a controversial tweet this was."

The @NSWlibdems Twitter account is run by the vice-president of the party's NSW branch, Peter Whelan. He acknowledged he retweeted the post, and defended it as "fairly tongue-in-cheek provocative".

"It's disgraceful that a party that claims to be committed to individual liberty would associate itself with such homophobic language," he said. "It's not about me as an MP - I have a thick skin - but this type of language perpetuates discrimination and hatred."

When shown the offensive post by Fairfax Media, Mr Zimmerman said the language was hurtful but he was more concerned about the dissemination of prejudice and hate.

Mr Whelan said he was "not aware" that the user was a self-described Nazi. "A national socialist isn't a good look for us to be associated with. It was certainly by no means an endorsement or supported that comment," he said.

The party's national account is chiefly run by Senator Leyonhjelm's advisor Gavin Atkins, although it is understood others also have access to it. Mr Atkins said he had no role in retweeting the post. The @auslibdems retweet was swiftly removed after the party was contacted by Fairfax Media on Tuesday morning but the @nswlibdems retweet was not.

Mr Zimmerman is the first openly gay member of the House of Representatives. He was elected as the member for North Sydney in December, following the departure of Joe Hockey from the Parliament. In a strong maiden speech delivered earlier this month, Mr Zimmerman defied advice he received from others in the Liberal Party who counselled him not to dwell on his sexuality.

"Too many [people] are prepared to peddle prejudice," he told his colleagues. "We will not have reached the end of the journey until no person feels compelled to live a life that is not their own. Until we recognise that a person's sexuality is not a choice or a preference – it is as innate as the colour of their skin."