New Zealand flags have been removed from streets in Bermuda in the dead of the night, with a witness alleging the acts have been carried out by people in Oracle-branded vehicles.

New Zealand Youth America's Cup Team manager Simon Hull also alleged the instructions to remove the flags had come from the top at Oracle Team USA.

"It's the weirdest thing I've ever seen ... I went for a walk late on Saturday night and these Oracle branded vehicles and people in Oracle jackets were out with ladders," Hull said.

"It was really quite a carnival-like atmosphere with the flags flying on Saturday...(but) they've stripped every lamp post."

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Kiwis love to show their patriotism. So when they strung up New Zealand flags to show their support for Team New Zealand's America's Cup bid in Bermuda, it didn't sit too well with Oracle.

But rather than rally their fans to fly the Star-Spangled Banner, Hull, who is in Bermuda, says the American team has taken a different approach.

Hull said he had spoken to members within Oracle's set up who told him the message for the team to take down all the New Zealand flags had come from the top.

"Their management are unhappy about the level of support for Team New Zealand and it's really getting under their skin.

"I'm told the message ... is to get rid of them, because 'how dare they (Team New Zealand) have more support than the local team'.

"Locally it's being called flag-gate. It's a big thing over here."

Neither Team New Zealand nor Oracle could be reached when Stuff attempted to contact them on Monday afternoon (about 11.50pm local time).

Hull was part of a group of New Zealand fans in Bermuda for the regatta who had decorated the front of their accommodation with New Zealand flags and silver fern bunting.

Another fan had put New Zealand flags on lamp posts on the main road on the morning of the first America's Cup races, but they were taken down the next day.

Hull said flags had been put back up since then, but were again taken down.

Oracle grinder Louis Sinclair posted an image on Instagram on Monday showing a teammate smiling as he tipped a bag full of New Zealand flags out on their locker room floor. The post has since been deleted.

The flags disappearing didn't seem to unnerve Team New Zealand, however, as they won both races on Monday morning (NZT) to come within one win of claiming the Auld Mug.