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London's City Hall has been unable to fly the EU flag to mark the seventh anniversary of the UK voting to leave the union.
The blue flag with 12 stars on it has been removed from a list of exempt flags which do not require planning permission for public buildings.
A City Hall spokesman said it was "extraordinary" that ministers had "effectively banned" the flag.
The government said it was up to the local planning authority.
"Advertisement consent is required to fly a flag outside of a public building if it is not included in the government's list of exemptions," it added.
Flags that are exempt from planning permission include the NHS, Commonwealth and United Nations and the Rainbow flag.
The Greater London Authority had planned to raise the flag in "solidarity" with EU residents.
A City Hall spokesman said: "The Mayor is proud to fly flags from City Hall - from the Union flag to the Ukraine flag in recent times.
"Flying a flag is a way of showing solidarity, expressing our values, and showing pride in the identities we share.
'With over a million people calling London their home from other European countries it's extraordinary that the Government has effectively banned the European flag being flown without going through a long and bureaucratic planning process."
In an open letter to EU Londoners, the Mayor of London Sadiq Khan said he was supporting calls to give EU Londoners the legal right to vote in General Elections across the UK.
The party is working on a package of proposals, including votes for some EU nationals and 16 and 17-year-olds in general elections.
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