A giant shot-scarred Union Jack that was flown at the Battle of Trafalgar has sold at auction for nearly £320,000, more than 20 times the pre-sale estimate.

The 11ft by 7ft flag (3m by 2m) from HMS Spartiate was bought by an anonymous American collector bidding against the National Maritime Museum and other would-be buyers from around the world.

The new owner of the flag, which is believed to be the last surviving Union Jack to have flown at Trafalgar — 204 years ago yesterday — paid a total of £384,000, including buyer’s premium and tax.

He said last night that he hoped the flag would go on display in Britain at some time.

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In the short term however, it may become the object of a battle to prevent it leaving the country. The Department of Culture, Media and Sport is considering a three-month ban on its export to give museums here the chance to raise funds to buy it.

The flag was made from 31 pieces of bunting by the Spartiate’s crew shortly before the victory over the French fleet off the Spanish coast in 1805.

After the battle it was taken down and presented to Lieutenant James Clephan, a singular honour for one of the ship’s junior officers. The flag has remained in Clephan’s family since and had been preserved in a drawer.

The current owner decided to sell it after moving to Australia and was delighted with the pre-sale estimate of £10,000-£15,000. Afterwards he was said to have been “blown away”.

The flag is riddled with holes from shot and splinters, and still has a whiff of gunpowder. News of its sale, first reported in The Times , attracted interest from institutions as well as private collectors.

The bidders included a representative of the National Maritime Museum in Greenwich.

A spokesman said: “We were nowhere near getting it. We gave it our best shot but the final amount was far in excess of our capacity.”

Charles Miller, the London auctioneer who sold the flag, said: “It was all quite exciting. We are a small auction rooms and we were packed in like sardines. There were about 100 people in the room and all 12 telephones were taken up. When the hammer eventually came down there was a huge round of applause.

“The price is way above anyone’s expectations but does reflect the historical importance of the flag and the battle it fluttered in 204 years ago today.”

Mr Miller added: “Naturally, it would have been nice had a British institution been able to purchase it but the buyer expects to make an approach to the Government very soon with a view of displaying the flag somewhere in Britain.”

A spokesman for the Department for Culture, Media and Sport said there was a chance that the flag would not be allowed to leave Britain.

He said: “It depends on numerous factors and will not be considered unless the new buyer plans to take it overseas. If this is the case, they will have to apply for an export licence. The case will then be considered by an independent panel.”

A press-ganged hero

• James Clephan, from Fife in Scotland, began life as a weaver, but was press-ganged in 1794, aged 26, into the Royal Navy

• At the battle of Trafalgar in 1805, the Spartiate and another ship, the Minotaur, served to block an attack on the centre of the British fleet, and captured the Spanish warship Neptuno

• Clephan retired a captain in 1840. He is thought to be one of only 16 men in naval history to have risen so high after being press-ganged

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