Three teenagers arrested after a group tried to set fire to a Union flag in a London suburb have been released on bail.

The youths, two aged 18 and a 17-year-old, were held at the scene in Twickenham on suspicion of racially aggravated criminal damage and inciting racial hatred.

Police say it is alleged that the suspects "made reference to the ongoing conflict" in Israel and Gaza.

Shocked local residents told how a have-a-go-hero chased down one of the yobs when the gang tried to set fire to the red, white and blue flag believed to have been taken from outside The Flag pub nearby.

It was claimed that the gang were shouting “Allahu Akbar” before police arrested them, although this is unconfirmed.

Officers were called to Church Street in leafy Twickenham just after 6pm on Monday evening.

Two flags were stolen from outside The Fox pub, but it is not believed any other businesses were targeted.

A woman who works in a different bar on the quaint pedestrianised road - but asked not to be named, described how a regular pub-goer got stuck in to stop the rabble.

She said: "It was one of our regulars that was in the middle of it.

"He caught one of the guys."

She added: "I've heard they took the flag and started burning it.

"Then he ran up to [the regular], who says he chased the guy.

"[The regular], apparently he heard them say Allahu'akbar."

She added: "This is such a nice place, it seems to be getting worse. It used to be quite safe."

Large flags hang from all of the boutique shops and food outlets along the idyllic pedestrianised street.

As of last week, the majority have been switched to black and orange pumpkins for Halloween.

The Fox pub confirmed two “British flags” were stolen from outside the premises.

A waiter at Naz Balti, immediately opposite The Fox, said the pub used to have two Union flags hanging outside.

He pointed out that they had been removed from their poles, adding the alleged flag burning would be a “big offence.”

Atin Miah, who has lived in Twickenham since 1973, said: “This area, as far as we know, we have never had a problem. I’ve never seen a problem.

“It’s one of the best streets in Middlesex, people are so nice.

“I came in today, I heard from one of my colleagues, something happened yesterday.

“What are they doing? It’s bad, seriously. If I had a customer in here, if someone just got into the restaurant, how would we feel?

“They’re stupid. What do they think is going to happen by taking the flags anyway?

“This is a big offence, because in Britain, along with other countries, it is really respected, that flag.

"That is important, not only for here, all over the world.”

A beautician, who works at a parlour and wanted to remain anonymous, said: "I know I left here about 7.15pm, there were a few policemen.

"I just saw the police afterwards, I was a little confused because there was no Union Jack flag [outside the pub], it's all Halloween flags."

A woman who runs Bubble Tea Hut, who would not give her name, said: "I remember I saw people running down, I was like 'oh, what's going on?'"

Staff at The Fox said said they handed footage of the alleged incident to the police.

The spokesperson said: “We are assisting police with their investigation following two British flags having been stolen from outside our premises.

“We would like to reassure our customers that safety of our customers is our number one priority and our CCTV has been handed over to the police.”

Richmond Council leader Gareth Roberts said: "Hate has no place in our society.

"I'd also like to urge people to report hate crime when they witness it.

"Silence hides hate, so no matter how small or trivial you think an incident might be, it is important it is acknowledged and reported.

"Reporting also means that you will get access to support and advice to help you feel safe again."

Police confirmed three people remain in custody and are being questioned.

A Met Police spokeswoman said: “At 6.09pm on Monday October 23 police were called to Church Street, Twickenham, following reports of a group trying to remove and set fire to Union flags.

"Two men, aged 18 and a 17-year-old boy, were arrested at the scene on suspicion of racially aggravated criminal damage and inciting racial hatred.

"It is alleged that the suspects made reference to the ongoing conflict in Israel and Gaza."

She added: "They were taken into custody and were later bailed to return on a date in mid-November pending further enquiries."