Communities Secretary Eric Pickles launched proposals to allow sports teams, pubs and societies to hoist flags for celebrations or recognition without paying a £335 fee.
Ministers hope the red tape-cutting move will boost local and national identities. Mr Pickles said: “If people want to celebrate something that is important to them by flying a flag, they should be able to do so without having to fill in forms or paying town hall officials for the privilege.
“We will make it easier for people to celebrate their allegiance to a cause, a county or a local organisation.”
Current rules prohibit the flying of all but county or national flags without permission.
The new plans will allow a wider variety of flags, such as regimental standards, environmental awards and the rainbow flag flown at gay bars, to be raised without planning permission.
Andrew Rosindell, who chairs the Parliamentary flags and heraldry committee, said: “Flags are an important part of our national and local identities.”