The Cali, as it's known locally, attracted national attention last year over management's attitudes towards COVID-19 public health orders.

Officialdom saw the pub as a public health threat endangering staff and patrons for effectively ignoring - or thumbing its nose - at various measures including vaccination checks. But its stridently anti-authoritarian outlook gained it the moniker The Freedom Hotel.

Now The Cali is in trouble again, this time over a large representation of the Australian flag that went up on its roof a few weeks ago.

Hotel management, saying they do not trust the media to report accurately, have declined to comment.

But hotel supporters posting on the Caledonian's Facebook page and the petition site change.org have told the story as they see it.

Similarly, Singleton Council has explained why it has objected to the flag, and issued "a 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".

The council's acting head of infrastructure and planning services, Damian Morris, said the notice was issued after staff, consulting with the council's heritage adviser, investigated a complaint from the public.

"While it is not unlawful to display a flag, to do so on the roof of this particular building requires development consent because the hotel is listed as a local heritage item in Council's Local Environmental Plan," Mr Morris said.

He said a development application (DA) for the "signage" was required by the Environmental Planning and Assessment Act but one had not been received "to date".

A spokesperson for Saturday's rally said "locals think the decision is un-Australian, unfair and unjustified as the flag was made and installed by qualified roofers, builders and painters".

"The flag on the roof should be a reminder to all Australians to know, understand and remember our history, and to stand against discrimination, segregation and to stand for freedom, democracy and human rights," the spokesperson said.

Organisers are asking participants to gather at Rose Point Carkpark at 9.30am on Saturday, before a "peaceful walk on the footpath" starting at 10am from the Singleton Sundail to The Cali.

Speakers include former police officer Roland Chrystal, workplace lawyer Peter O'Brien, Independent candidate for Hunter, Stuart Bonds, and Senate candidate for the Liberal Democrats, John Ruddick.

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