Publican Brad Hill said on Monday that the council's letter to the pub arrived in time for National Flag Day on Saturday. Since 1996, National Flag Day has encouraged Australians to fly the flag on September 3 each year, the anniversary of the first raising in 1901.

Mr Hill said the letter dated August 29 and headed "Notice of Intention to issue a Development Control Order Demolition Order" read as though the council was prepared to demolish the building over the flag.

"They object to the flag on the roof because The Cali is on the local Singleton heritage register," Mr Hill said.

"You could read this letter to say they intend to demolish the building in the name of the same heritage. But it couldn't be that, surely? Even so, even if it's just demolishing the sign, that's our building. It's private property.

"I've told them, I can cover the roof of a heritage building in solar panels. How would that look, heritage-wise?

"We have owned the pub for more than 20 years and we haven't gone and sought government money - heritage grants and the like - but we have always looked after it and done more than we had to to look after it.

"I put the flag on the roof because I thought it would look good up there. Then the council came to us and said you can't do that, you should have put in a development application for it. But then they say that even if you do that, we probably wouldn't approve it anyway. So what's the point?

"I put it up because I thought it would look good. And it does. And now it's become so well-known that travellers pull up across the road and have their photos taken with it. It's a tourist attraction!"

As ACM has reported, the Caledonian Hotel - or "The Cali" to Singleton locals - came to national prominence during the COVID lockdown era for an anti-authoritarian stance that led to it becoming known as "The Freedom Hotel".

Mr Hill said yesterday he was fined a total of $25,000 for various COVID breaches over unvaccinated patrons, without, he said, "a single case of COVID at the pub".

ACM reported the flag controversy in April after the council confirmed its "Notice of Intention to Issue a Development Control Order for the removal of a painting of a Union Jack and Southern Cross from the hotel's roof".

Mr Hill said the August 29 letter used similar language and set out the council's ability to seek civil proceedings, or "summary criminal proceedings" under Section 9.57 of the Environmental Planning and Assessment Act, with a "tier 2 maximum penalty" of "$500,000 and, for a continuing offence, $5000 a day for every day the offence continues".

Singleton mayor Sue Moore said on Monday she did not know the August 29 letter had been sent. She said it was an "operational" matter under the control of general manager Jason Linnane, who also said he was unaware of the letter.

Cr Moore said she was "disappointed" at the developments, especially if Mr Hill had tried to contact the council but heard nothing happened for months until the letter arrived.

A council spokesperson later confirmed the letter and said the council encouraged the pub owners to "engage with council to resolve the matter".

Singleton resident Kellie Groves, who started a change.org petition in support of the flag, said a flood of signatures in recent days had taken the total from 3500 to about 5000.

Mr Hill said he had various offers of help from state and federal politicians if the council tried to move on the flag on the roof.