During the committee meeting, council officers outlined a report which included comments from the public about the flag.
Six people gave their support to the painted flag, four people objected and two people gave mixed comments.
Mike Fowler read a statement on behalf of Kunkler.
“This is an overtly English sports bar which does not serve food,” he told the committee.
“The red English cross on the outside of the building is an integral part of the identity of the pub.”
Councillor Paul Oatway described the comment about the National Front as “ridiculous” and told the committee that only five people in Pewsey, which has a population of just under 4,000 people, had complained.
Councillor Stuart Wheeler said people in Pewsey did not consider there was “any harm” from the flag and described the pub and its landlord as famous.
The pub, known locally as the Moonies, was the inspiration for the play Jerusalem by Jez Butterworth, in which Mark Rylance starred, Wheeler said.
“People come from all over the country to see where Micky Lay died on the doorstep, waiting for the pub to open,” he added.
“This pub is famous. This pub enhances the environment, it does no harm.”