Nick Clegg claimed in the Commons that "the labour party in Newcastle is closing every single arts and cultural institution" in the city.
Labour MP for Newcastle North Catherine McKinnell said the comment was "quite blatantly not true".
The council proposed a 100% cut to arts funding in its draft budget but says is not closing arts organisations.
Ms McKinnell added said: "[The cuts] represent roughly 15% of their funding stream which is no doubt a difficult decision but it's far from shutting all arts venues in the city."
Labour MP for Newcastle Central Chi Onwurah asked the Commons Speaker, John Bercow, if it would be "in order for the deputy prime minister to offer an apology to the people of Newcastle".
Mr Bercow said it would be "in order" but that it was not for him "to decree that he should".
In a debate in the Commons Mr Clegg accused Newcastle City Council of "shameless political opportunism and cynicism".
He carried on to incorrectly suggest the council was closing all the city's arts venues, which he said "non-Labour councils are not doing".
His comments were in response to a question from Ms McKinnell in which she asked whether his party would be voting against the local government settlement bill.
She said that, since local liberal democrats had been "campaigning to save public services", voting in favour would leave his party and councillors "looking extremely opportunistic".
A Lib Dem spokesman said: "The Deputy Prime Minister was referring to the shocking decision of Labour-run Newcastle Council to withdraw its support for all arts and cultural facilities in the city, which will inevitably lead to many job losses and closures.
"Of course Nick Clegg will be pleased if, despite the Labour run council's act of cultural vandalism, some institutions are able to stay open thanks to central government support and philanthropic generosity."
The deputy prime minister is facing calls to apologise over an attack on Newcastle City Council's arts funding.