A taxi driver said he was furious after the council tried to ban him from displaying a Help for Heroes sticker in his car.
Doncaster Council has now backed down over a threat to suspend driver Stephen Searston if he did not remove the stickers from his vehicle.
Mr Searston, aged 46, who has been a cabbie for 13 years, said he was threatened with suspension for displaying the sticker after alleged complaints from other drivers.
He said: “Not 25 minutes earlier I was given the all-clear following a visit by an official to St Sepulchre Gate taxi rank.”
“After he spoke to some of the other drivers he came back to me and said ‘you have to take the stickers down following other drivers’ objections’.
“I was only trying to support our lads in the Forces and I was told I couldn’t – it’s not right.
“It seems no one has had the nerve to complain to my face.”
Director of regeneration and environment Peter Dale said Doncaster Council fully supported the Forces, veterans and Help for Heroes and the authority understood that it was important for people to show their support for them.
He said: “All drivers are bound by our licensing conditions which state that they must seek approval from the council before displaying any adverts, notices or posters in their taxis.
“Although Doncaster Council is proud to support Help for Heroes, we must be fair to all and apply our licensing rules consistently.
“We met the driver to explain the correct process and, having completed this, he can now display the stickers.”