James, and many of military colleagues attended the funeral of their friend in County Meath last week and is customary for servicemen, the tricolour was placed on the coffin of the deceased.
The celebrant of the funeral mass asked that the flag be removed before the coffin was brought into the church causing offence and upset among the military gathered.
The priest's actions are in contravention of Conference of Bishops guidelines, which gives the Church's blessing to allow ex-service personnel to have the tricolour on their coffins.
The priest has since issued a statement to the Joe Finnegan Show, which first broke the story about flag-placing regulations last summer.
The priest said he "very much regretted" the move and it was "certainly not his intention to cause upset".
Ex-defence forces member James said the Bishop's blessing must be communicated at parish level to prevent the scenario from happening at another colleague's funeral: "I served under the UN as a young soldier and grew up in the military," James told the JF Show, "The flag means everything to me. Absolutely everything to me. I'd like to see families I know getting the flag. It's an honour, an honour to get the flag draped on your coffin when you eventually do pass away. It's an absolute honour. What's wrong is it's just not getting passed down from the hierarchy to priests and different locations so that every time we go to do a military funeral there's a different story."