Michael Gallagher said that relatives of those killed and injured were considering picketing the event even though it would be extremely difficult for them, coming so soon after the anniversary of the bombing.
Michael Gallagher, whose son Adrian was killed in the Real IRA bombing of the County Tyrone town, said he was horrified to learn of the function to be held in a west Belfast bar, three days after the second anniversary of the attack.
The hardline republican lobby group, the 32 County Sovereignty Committee, has organised the event in aid of the Irish Republic Prisoners Welfare Association to be held on Friday 18 August.
Martin Galvin, a one-time leading Noraid activist, is to be the guest speaker.
Michael Gallagher said that relatives of those killed and injured were considering picketing the event even though it would be extremely difficult for them, coming so soon after the anniversary of the bombing.
"It is three days after the anniversary and it is a very difficult time, so I don't know if the relatives would be up to it," he told BBC News Online.
"But we feel very strongly that these people are raising their heads again into the public domain.
"They are slowly trying to gain more respectability as the thing goes on. "And we feel very aggrieved that someone like Martin Galvin from Noraid is coming over," he said.
Arms seizures
Mr Gallagher said he believed recent arms seizures in Croatia and Northern Ireland illustrated that dissident republican paramilitaries intent on wrecking the peace process were increasing their activities.
A quantity of weapons and ammunition, which police said they believed was linked to dissident republicans, was seized from a car on the M1 motorway near Lisburn, County Antrim on Monday.
The 32 County Sovereignty Committee is opposed to the 1998 Good Friday Agreement peace accord and the participation of mainstream republicans, Sinn Fein, in the current political process sharing power in Northern Ireland with unionists.
Its website advertises its fundraising event for prisoners as an evening of craic agus ceol - fun and music.
But Mr Gallagher said: "I would appeal to the people of west Belfast who supported us in the days following the bombing to give these people no welcome."
Mr Gallagher added that the position of the British and Irish government in relation to hard-line republicans was a disappointment.
"We feel that the promises what were made after the Omagh bomb have not been lived up to. We were led to believe that this type of activity would not be tolerated."
Responding to the idea of a possible picket of the fundraiser, a spokesman for the 32 Sovereignty Committee, Joe Dillon, said his group had nothing to do with Omagh.
He added: "This man's personal tragedy is no excuse for him interfering in our democratic right to pursue our political objectives."
The Omagh bombing was worst single terrorist attack of the Troubles in which 29 were killed and over 200 people were injured when the bomb exploded on Market Street in the centre of the town on a busy shopping day in August 1998 just a few months after the signing of the agreement.
After a telephone warning people were moved towards, instead of away from, the blast.