a site for generating charts for knitting patterns and the example they give is the British flag. I wonder what you can do for the reverse side? If you use intarsia or a combination of fair isle and intarsia, you'll need to cover the seams and floats. The best would be to knit two flags back to back.
Well whatever you decide to do, it sounds like fun. A small flag, I hope, because the jubilee is this week, isn't it?