Heptathlete Jessica Ennis and triple jumper Phillips Idowu were among 32 athletes from a range of sports modelling the gear as tourists and excited parties of schoolchildren watched.
McCartney, who was appointed by German sports giant adidas as creative director for the project, reconstructed Britain's Union flag in shades of blue but she did use red for the 38 styles of shoe designed for the 26 Olympic and 20 Paralympic sports, as well as for Idowu's knee-high socks.
The 900-strong British team will get competition and training kit, a presentation suit, casual attire to wear around the Olympic village and other accessories.
While looks are important, with British gymnast Louis Smith describing the attire as "sexy but professional", designers say everything possible has been done to make the British team "faster, stronger and cooler" as they bid for gold medals.
"I love what Stella has done with the design," said former world champion and Beijing silver medallist Idowu, known for his colourful hairdos.
"Looking good is psychologically important but my sprint suit is also technically advanced, so not only do I look good but I also have confidence in the technology in the kit."
Team suppliers adidas say their cutting-edge technology will aid muscle movement and slice precious tenths of seconds off times on the track and in the pool.
Video: Kit unveiling
Smith, who became the first Briton to win an individual medal in gymnastics for 100 years in Beijing, provided the highlight of a glitzy launch parade, rising through the floor of the stage with legs outstretched on the pommel horse.
"It looks fantastic, very royal, very patriotic. We want to be very professional but sexy at the same time," Smith told Reuters before a passing pigeon spattered his skin-hugging suit with droppings.
McCartney, daughter of Beatles great Paul, said she had put the Union flag at the forefront of the design.
"For me it's one of the most beautiful flags in the world and it was important for me to stay true to that iconic design but also to modernise it and present it in a contemporary way," McCartney said.
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