The incident happened between around 10pm and 11pm on December 10 in Shotton Colliery.
The incident is now an official crime scene as officers from Durham Constabulary look to track down those responsible.
PC David Allan, from Peterlee Neighbourhood Police Team, said: “This was a disgusting act of mindless vandalism, which has caused huge upset throughout the village at a time when our community should be coming together.
“We are treating this incident extremely seriously, and we will deal with anyone responsible as robustly as the law allows.
“This behaviour has no place in our community. Someone knows something - please help us find who is responsible.”
Anyone with any information that could help the investigation should contact PC Allan via email at [email protected] quoting crime reference number CRI00653425.
9. Christmas misery
The tree was felled just hours after the village turned on its Christmas lights. | North News & Pictures Ltd