The trunks, which were designed by members of the men's team currently competing in the Asian Games in Guangzhou, China, show the flag's white crescent moon jutting up from the groin area with five stars to the side on a red background.
"Unfortunately the team did not seek our advice on the use of the crescent moon and stars when they designed their swim trunks," the Information Ministry said in a statement Thursday. "We would have told them that their design is inappropriate as we want elements of the flag to be treated with dignity."
The ministry, which normally evaluates the use of the flag on uniforms on a case-by-case basis, declined to specify which part of the design was objectionable.
The trunks sparked a controversy in the local media and on Internet message boards, with some offended by the use of the national flag while others were amused at the furor.
Asian Games rules stipulate that a team's uniform cannot be changed in the middle of the tournament, so the government will allow the water polo players to wear the trunks when they play Kuwait on Thursday for fifth place. The team apologized and said it would retire the trunks after the Asian Games.
"We didn't have the slightest intention to do anything funny on our trunks to insult Singapore," team manager Samuel Wong, who helped design the trunks, told the Straits Times.