Updated

By Steve Keating

VANCOUVER (Reuters) - Olympic chiefs went toe-to-toe with a boxing kangaroo on Friday when the Australian Olympic Committee (AOC) refused to remove a giant flag of the iconic character hanging in the Winter Games athletes' village.

"It is our mascot," said defiant AOC spokesman Mike Tancred. "It says what Australia is; that we punch above our weight, that we are a very determined nation."

The dispute developed into a minor international incident

after an International Olympic Committee (IOC) official ordered the AOC to take down the flag earlier in the week because it bears a registered trademark and is a commercial property.

But the AOC has said the flag, which depicts a yellow kangaroo wearing red boxing gloves, will remain in place until it receives an official written request from the IOC.

The IOC told Reuters they were looking into the matter.

"It's something our athletes love, it's something the young volunteers in the village love," said Tancred.

"I just walked out of the village and I was probably stopped by about 10 volunteers saying, 'please don't let them take down your flag'.

"We will take it down if the IOC write us a letter and tell us to but if we do there could be a riot."

FLAG FLAP

While the flag flap is unlikely to spark actual riots in the Olympic city, athletes, politicians and volunteers have rallied around the Australians.

The mayor of Surrey, a Vancouver suburb, has offered to fly the boxing kangaroo there while the Premier of British Columbia Gordon Campbell and Vancouver Olympic organizing chief John Furlong have both viewed the standoff with humor.

"If that's the kind of issue we're dealing with, we're well set for the Olympics," Campbell told reporters.

Politicians in Australia, however, were not quite so relaxed about the issue.

The boxing kangaroo first appeared on the Australian sporting scene in 1983 when Alan Bond and his crew waved the flag on the way to winning the America's Cup yachting race.

Bond later sold the trademarked image to the AOC, the boxing kangaroo becoming a symbol of Australia's fighting spirit.

"The Deputy Prime Minister, Julia Gillard, she has come out in our support and the leader of the federal opposition Tony Abbott has come out in our support, so we have cross party support and that's really refreshing," said Tancred.

"We want to have fun at these Games. We're here to do some very serious business but the athletes also have a lot of fun in the village. These sort of issues are not what the village is about.

"It's a fun place, a happy place."

(Editing by Jon Bramley)