The Foreign Office has intervened in a diplomatic row over the flying of Taiwan’s flag in central London during the Olympics.

The red and green emblem of the Asian island was removed from a display of 206 national colours in the heart of the West End amid concern it would upset the Chinese.

It was replaced with the flag of the Chinese Taipei Olympic Committee.

Taiwan has used this flag at Olympics since the early 1980s after the International Olympic Committee ruled it could not compete under the name of the Republic of China (ROC) – as Taiwan is formally known.

Chinese officials are believed to have raised concerns over the use of Taiwan’s flag at the Regent Street Association’s display.

A Foreign Office spokesman said: “We contacted the RSA (Regent Street Association) and suggested they might want to talk to LOCOG regarding the flag under which Taiwan participates in the Olympics. With all parties we have been clear that this is a matter for the RSA.”

But Shen Lyushun, Taiwan’s most senior representative to the UK, slammed the decision to remove the flag and said Taiwan was being censored.

The Chinese regard Taiwan as a rebel province and see the use of the flag as an expression of its independence.

Mr Shen said: “In a democratic country and in a larger sense, we believe this kind of issue should be regulated by the freedom of expression without undue intervention from a third party. We sincerely hope that our national flag will be returned to its original place soon.”

The row over flags is the second to hit the Games after Locog was forced to apologise to North Korea for using the South Korean flag in a pre-match video introducing the women’s football team at Hampden Park in Glasgow yesterday.

The North Koreans stormed off the pitch and refused to return for nearly an hour before the introductory footage was amended to show the right flag.

A spokesman for Locog confirmed the dispute but denied being responsible for the final decision to replace the flag.

He said: “The Regent Street Association put the flag up. The complaint came in to the Foreign Office.

“There was a meeting with the Regent Street Association, the Foreign Office and ourselves. We were kept in the loop.

“It was the Foreign Office who advised it to be taken down.

“The complaint from the Chinese came into them.”

The removal of the Taiwan flag yesterday left a conspicuous hole in the rows of national colours in Regent Street that angered Taiwanese residents in London.

Annie Walker, director of the Regent Street Association in charge of the display, said she was told it would be better “ politically” if the flag was changed.

She said: “We all know our politics so obviously the Chinese were not happy. I was asked if there was a possibility of changing the flag by the Foreign Office after discussions with Locog. Obviously China and Taiwan was mentioned and it was discussed.”

Under an agreement with the IOC in 1980 Taiwan — which competes as “Chinese Taipei” — displays the flag of its Olympic committee rather than its national emblem at Games venues. Last night the “ correct” flag was raised. Ms Walker said: “A mistake was made. The correct flag has been put up.”

London’s Taiwanese community accused China of “bullying” the organisers of the flag display. Charles Chen, a former spokesman for the Kuomintang political party who is studying in the capital, said he felt “saddened, shocked and sorry” by the decision.

A spokesman for the Crown Estate said: “The correct flag for Chinese Taipei will be hung in time for the torch relay.” A spokeswoman for the Chinese embassy would not comment.