He said new leader Jeremy Corbyn could not "just pull his money out of nothing", and slammed the Islington MP for believing in a "magic money tree".
Zoe Williams, a Guardian columnist, hit back at the claims, saying: "Obviously there is a money tree - it's called the Bank of England."
But her rebuttal left McTernan less than impressed, his withering eyebrows raised scathingly in response to the remark.
The move prompted uproar on social media, when John Prescott, with whom McTernan has a long-running feud over Corbyn's victory, intervened.
The ex-deputy Prime Minister posted a picture on Twitter of the moment captioned: "Spot the idiot," with a none-to-subtle finger-pointing hand grafted on, directed at McTernan.
Singer and left-wing activist Billy Brag, a long-time defender of Corbyn, also joined the fray, writing:
McTernan's response instantly shot to fame, with some commenters saying they would save and use it as a reaction GIF, others that the look on his face was "priceless".