It's a pennant from the the BDM (Bund Deutscher Mädel, i.e. "League of German Girls").
I would tentatively identify it as a Jungmädelgruppenwimpel, i.a. pennant for a Group of the Jungmädel ("Young Girls", the BDM's junior branch), but I could be wrong there as this is not my area of expertise.
Other members may be more knowledgable about this subject.
Thanks very much for the quick reply - I wonder how on earth he ended up with that! He also left an iron cross and bayonet which is in ok condition (I am presuming that is german too). I will post a pic of them when I dig them out.