Whakatane's mayor says the assault on a four-year old boy because of the colour of his T-shirt illustrates the need for national legislation to ban the wearing of gang patches.
Police say a man, who was wearning blue clothing, shouted at the child to take off his red shirt, and then forcibly removed the boy's shirt, at a Cutler Crescent park last Thursday.
Initially, police say, the offender was initially thought to be a member of the Black Power gang, but may just be part of a "wannabe" youth group.
Whakatane mayor Colin Holmes says the incident may have been avoided if his council had been able to follow the example of Whanganui, where there's a ban on gang insignia.
He says police need more powers to deal with such problems and he hopes the Government will be spurred into action.
However University of Canterbury researcher Jarrod Gilbert, who has spent six years studying gang culture, says removing insignia will simply make the problem invisible
Mr Gilbert says it would increase the chance of people being injured by gang members through mistaken identity.