The design of the New Zealand ensign that was to be flown by ships owned by the colonial government was established by the publication in the New Zealand Gazette of a proclamation by the governor, Sir George Bowen.
The British Admiralty had moved s few years earlier to standardise the ensigns flown by British and colonial ships. Vessels owned by colonial governments were to fly a blue ensign with the Union Jack at top left and the ‘badge’ of the colony at right. But New Zealand had no badge, so its government steamers initially flew the plain blue ensign that was reserved for British government vessels.
Following a British rebuke, New Zealand officials considered using either the official seal of the colony or the words ‘New Zealand’, but both proved difficult to incorporate in the space available. Instead, the letters ‘NZ’ in red lettering with a white border were added to the blue ensign in 1867. Two years later the government revived an earlier idea and adopted a design representing the Southern Cross, four five-pointed red stars with white borders. This version of the blue ensign was soon the de facto New Zealand flag, and by the end of the century it was often flown on government buildings (see 12 June 1902).
NZ History