Galagodaatte Gnanasara criticised the India-based Tibetan spiritual leader after he asked Buddhists in Sri Lanka to halt violence against minority Muslims.
"Like the Pope is regarded as the leader of the Catholics, the US has made Dalai Lama the leader of the Buddhists. We do not accept this," Gnanasara said.
Gnanasara accused the 74-year-old Nobel Peace Prize winner of being a victim of "Islamic extremist propoganda".
"Dalai Lama has become a victim of Muslim extremism," the nationalist Buddhist group Bodu Bala Sena (BBS) or the Forecs of Buddhist Power declared.
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The BBS was irked by Dalai Lama's remarks which inferred that the Muslims in Sri Lanka have come under much harassment.
"We ask him where in this country that such harassment is happening," Gnanasara stressed.
The Dalai Lama had made the remarks as a response to mid- June's anti-Muslim violence in the south western region of Beruwala which claimed four lives.
The BBS, which has been carrying out a campaign against what they have termed rising Muslim extremism in the Buddhist majority island since 2012, came under criticism for the unrest.
Gnanasara said the BBS had abandoned a plan to meet the Dalai Lama at Dharmasala.
"Many attempts to make Dalai Lama visit Sri Lanka had been shelved because of opposition coming from China," he said.