According to the terms of LOCOG, (London Organising Committee of the Olympic Games) restricted items include…
Flags of countries not participating
in the Games (this excludes the
flags of nations under the umbrella
of a participating country such as
England, Scotland and Wales).
And since there are three historic nations in Spain (Galicia, Euskadi and Catalunya), as recognized by their own Autonomy Statutes embedded in the Spanish Constitution of 1979, their flags should therefore be allowed in the Games.
We contacted LOCOG to confirm this and for them to provide a specific authorization to display the Basque flag freely at the 2012 Olympic Games.
So if you support any Basque athlete and are attending the games, feel free to download a copy of this flag authorization here. Take it along with your flag (in case anybody asks you to put it away) and enjoy a fantastic event which is proving one of the most exciting to date, specially for Team GB.