Prime Minister John Key's social media adviser registered the changetheflag.nz website - but the group says that does not undermine its claim to independence.
Gwynn Compton has locked down his own social media accounts after a stoush on Twitter between an anonymous user and the adviser resulted in the claims of bullying from the top.
In his spare time Mr Compton is involved with the Change the NZ Flag campaign, which aims to get New Zealanders behind the movement for a new flag.
Change the NZ Flag says it is an independent and non-political organisation, and spokesman Lewis Holden said Mr Compton's involvement did not jeopardise that.
"This group has been around for about 11 years, it was originally started back in 2004 by [Wellington businessman] Lloyd Morrison...we created a new registered incorporated society, basically for the referendum campaign," Mr Holden said.
"Gwynn got involved on the social media side, he registered the website for us...and that's basically been his involvement.
"Obviously, because he works in the PM's office there is a perception of a conflict of interest, which is something I raised with him initially and he said he had cleared it with his employers.
"It's only because of this other thing that he's done that the whole thing has blown up as an issue."
Gwynn Compton works for Mr Key in his capacity as National Party leader and back in March he had tweeted in response to an anonymous Twitter user @JohnKeyMustGo: "You think you're so clever. But you're not that good at hiding your online fingerprints. Have a nice day :)"
The exchange was posted on Twitter today by blogger Giovanni Tiso, who also posting a screenshot of Mr Compton's LinkedIn profile listing his role with Mr Key.
Mr Tiso wrote "Who is this delightful fellow who claims to work for the PM and threatens to track down his critics on Twitter?"
It sparked a flurry of responses describing Mr Compton's actions as "bullying" and "dirty politics".
The JohnKeyMustGo user tweeted: "Bullying is 1 thing. Bullying from John Key's office is something different."
Mr Compton has since locked his Twitter account and removed any reference to Mr Key's office from his LinkedIn profile.
A spokeswoman for the Prime Minister said Mr Compton's role in the National Leader's Office involved helping the National Party and its MPs, including the leader, with their Facebook and Twitter accounts.
"Anything he posts on social media in his private capacity is exactly that."
The role of advisers for the National Party came under scrutiny last year after the publication of the Dirty Politics book which included communications between a former adviser to Mr Key, Jason Ede, and blogger Cameron Slater.
The user had also posted Mr Compton's role with the Change the Flag campaign.
Mr Compton's Twitter account is in his own name and did not mention his role with the PM's office but stated that he was "some flunky social media adviser" and "flag change campaigner at changetheflag.nz in my spare time".
Mr Holden said New Zealand's size meant it was impossible for lobby groups here to avoid members having links to political parties.
"I was involved for campaigning for MMP, for example...there are political activists all over the place...it is kind of unavoidable, we don't have a professional lobbying class like they do in the UK or the US.
"This has been our challenge, is actually finding someone to be a spokesperson. The problem I have is I was a National candidate, which of course everyone has jumped on as well.
"I can tell you now, within the National Party there are people who don't want to change the flag and they are quite vocal about that. We have people from across the political spectrum - the Greens, Act."