My little book (How to Run a Motor Race) from the '60s mentions blue flags. It starts:
"The use of this flag is explained..for two reasons: it is the safety flag, the only one used on the circuit that may prevent an original incident or accident and it is the flag that is misused more than any other."
However, the book goes on to say (after defining the use and limitations of the flag) that strictly adhering to that definition it would quickly render it useless.
So - without delving into the depths of the regs (from whatever era), blue flags seem to have been around for ever and there is still debate around their use, even after all that time.
As a flag marshal (15 years at last reckoning) I still say that if I show a stationary blue, I expect the driver to look in his mirror. If I wave a blue I expect him to look in both mirrors and do something.
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