The lawmakers were under pressure to act after the state Senate passed its version of the measure, which Haley supported.
The flag debate regained urgency last month after the deaths of state Sen. Clementa Pinckney and eight other black people. A white gunman who police said was motivated by racial hatred is charged in the attack. The battle over the banner was stoked by photos of the accused shooter posing with the battle flag on a website bearing a racist manifesto.
The murders sparked a bipartisan wave of repudiation across the South, from politicians to businesses, led by Haley.
As the House debate began, the South Carolina Law Enforcement Division said it was investigating threats sent to legislators on both sides of the issue.
The debate was civil most of the day, but the bill appeared to be in trouble as the debate ran late into the night on Wednesday as Republicans launched dozens of amendments seeking to soften the impact of taking down the flag and move it to a museum.
One of them, Rep. Mike Pitts, said to banish all flags from the site would be akin to erasing history, including that of his family members in Laurens County and the mountains of North Carolina and Virginia.
One amendment proposed flying the flag of the 1st South Carolina Volunteers regiment, a blue banner similar to the state flag, with its Palmetto tree and crescent moon but with a wreath around the tree. Similar art is etched on a wall in the Statehouse, Pitts said.
One would have put the flag issue to a popular vote. Another would have allowed the rebel banner to fly only on Confederate Memorial Day in May, and a third would replace the Confederate battle flag with a different banner.
During the often heated and emotional debate, opponents of removing the flag talked about grandparents who passed down family treasures and lamented that the flag had been "hijacked" or "abducted" by racists.
Republican Rep. Jenny Horne reminded her colleagues she was a descendant of Confederate President Jefferson Davis and scolded fellow members of her party for stalling the debate with dozens of amendments. She cried from the front of the House as she remembered Pinckney's funeral. "For the widow of Sen. Pinckney and his two young daughters, that would be adding insult to injury, and I will not be a part of it!" she said.
After the flag was pulled off the Statehouse dome and moved to a monument honoring Confederate soldiers elsewhere on the Capitol grounds 15 years ago, it was considered a settled issue.
Al Jazeera and wire services
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