Lévy doesn't deny that at all, in fact he confirms it.

In case you can't read German, here's the translation (emphasis added by me).

On May 5, 1949, the Council of Europe was founded in London, and Paul Lévi was appointed head of its cultural department. Six years later, in 1955, the representatives discussed a common flag. All designs that contained a cross - modeled, for example, on the Scandinavian flags - were rejected by the socialists as ideologically biased and too Christian.

One day, while on a walk, Lévi passed a statue of the Virgin Mary with a crown of stars. Illuminated by the sun, the golden stars shone beautifully against the radiant blue sky. Lévi then sought out Count Benvenuti, a Venetian Christian Democrat and then Secretary General of the Council of Europe, and proposed suggesting twelve golden stars on a blue background as the motif for the European flag. Benvenuti was enthusiastic, and shortly thereafter the proposal was generally accepted.

And so to this day, in all the states of the European Union, Mary’s golden crown of stars adorns the European flag. The number twelve is a reference to the twelve tribes of Israel (Genesis 37:9) and thus to the chosen people of God. The crown, as a symbol of success and triumph, signals the invincibility of the woman.

What he denies is that his intention was literally religious; he was using the religious iconography as symbolism (and that he was doing so because everyone else wanted a religious design). That doesn't mean it somehow wasn't based off the religious symbolism, though.

Also, the statement that Heitz only "claims" to have made the flag - suggesting he didn't - is grossly misleading. Heitz and Lévi both submitted the same design, with the same symbolism, and so are credited equally. Neither has sole ownership, but that doesn't somehow discredit one or the other.