Staff at the British Embassy in Dublin insisted yesterday they were unaware of a ban on the Union flag, despite claims by David Trimble that the flag could not be flown in the Republic.
A spokeswoman said the Union flag with a diplomatic crest was flying yesterday above the embassy in Ballsbridge and was hoisted above the building every day.
She also said she had seen the flag flying outside various hotels in the Republic and at Dublin airport.
A spokesman for the Department of Foreign Affairs in Dublin confirmed that there was no ban on flying or displaying the union flag in the state.
Mr Trimble made the claim about flags during an interview in the United States at the weekend with the board of the Chicago Sun Times.
"You still can't fly Union Jacks in Ireland," Mr Trimble was reported as saying.
"They'll have a special in the stores for European Union items and you'll see the flags of every country in Europe except the Union Jack, which will be littered on the floor."
During the same interview Mr Trimble said the Republic would not exist as a state "if you took away Catholicism and anti-Britishness".
Yesterday the Ulster Unionist leader tried to distance himself from the remarks and claimed that they had been taken out of context.
"I had a meeting with them for about 15 minutes and you get a couple of phases that are lifted and you can see from the text that it is a fairly casual conversation," Mr Trimble said.
However, the editor of the Chicago Sun Times, Michael Cooke, dismissed Mr Trimble's claims that his comments had been distorted.
"It's very disappointing that he resorts to the 'I was taken out of context' excuse," said Mr Cooke.
"Its a real pity because I really liked the man and I think it is a pity he is doing this."
Sinn Féin president Gerry Adams described Mr Trimble's comments as gratuitous and unnecessary and pointed to remarks earlier this year when the UUP leader described the Republic as "a pathetic, sectarian, mono-cultural, mono-ethnic state".
"Maybe these are unscripted remarks but I think it says more about Mr Trimble and where unionism is than it does about anything else," he said.
"While those remarks may have been unscripted, remarks where he actually talked about a pathetic sectarian little state were part of a script. Maybe that is his own feeling about all of this, or maybe it is part of the electoral competition with Dr Paisley."
The new leader of the Labour Party in the south, Pat Rabbitte, described Mr Trimble's remarks as "ill-considered and ill-informed", but said they were "by no means unique among unionists in Northern Ireland".
"We need to take steps to encourage greater knowledge of this state among unionists in Northern Ireland, just as we need to promote a better understanding in the Republic of life in Northern Ireland," he said.