Loyalists have told the Haass team there can be no such thing as a neutral or new flag for Northern Ireland.
Billy Hutchinson was speaking after a PUP delegation met US diplomat Dr Richard Haass and Dr Meghan O'Sullivan as part of the continuing talks on flags, parades and the past.
The PUP leader was accompanied by Dr John Kyle, Winston Irvine, Izzy Giles, Billy Mawhinney and Ken Wilkinson, with their meeting coming during a critical phase in these negotiations.
A pre-Christmas agreement is the goal of the Haass team.
"This shouldn't be about diluting people's culture," Mr Hutchinson said afterwards.
"We are saying very strongly our Britishness, our culture and our heritage are all very important to us.
"We told him there is no such thing as a neutral flag or a new flag.
"The only flag is the flag of the nation," the PUP leader said.
The former Stormont MLA, who is to return to city council politics in the new year, replacing the retiring Hugh Smyth, stressed what he believed should be the context for any deal.
"This is a British devolved administration," Mr Hutchinson said. "That's the context. No matter what decisions are made by the five Executive parties they need to make sure they are connected into people on the ground."
The Haass/O'Sullivan team is spending around 30 hours this week in negotiations with the DUP, Sinn Fein, SDLP, the Ulster Unionists and Alliance.
Speaking after a meeting yesterday, SDLP negotiator Alex Attwood said: "It's become quite simple. Are we going to have big and bold outcomes or not? Are the parties and governments going to get this over the wall or not?"
It is understood that his party had a "blunt" meeting with Secretary of State Theresa Villiers on Tuesday.