I suppose someone ought to note that AOC-in-C Strike is late of 206 to inject the appropriate note of cynicsm...
I did hear rumours that someone very senior wished to do exactly as JN suggests - namely turn the flights into squadrons. The precedent for this <pulls on anorak yet again> is 84 Sqn with Wessex. It was agreed that a sqn could form with as few as three aircraft, since it was felt to be important to preserve sqn number plates of more historic units.
Despite the gap at the end of the war for 206, it's service overall that counts. 206 was senior to 120 in 1973 (from when the last open documentation on this comes) and remains so.