Senior government officials have been told to investigate whether flags can be flown at the Cenotaph to remember the war dead.
Veterans have petitioned Tung Chee-hwa asking him to authorise and support the daily hoisting of national and SAR flags at the war memorial opposite the Legislative Council Building in Central.
Mr Tung's office has now ordered the Director of Administration to look into the matter.
Confusion surrounds who controls the monument and ceremonies held there.
While the Chief Executive has final say over where the Chinese national and SAR Bauhinia flags may be flown, the Urban Services Department tends the site and the Government's Protocol Office used to organised remembrance services there.
Before the change of sovereignty, British troops raised flags representing the British Army, Royal Navy and Royal Air Force every morning, lowering them again before sunset.