exactly as per the AFM. On my aircraft the AFM says at V2+20. Height is not "a condition for flap retraction. It doesnt matter if you are all engines operating or one engine inop. Its exactly the same. Retract the flaps at V2+20. If you can't accelerate to V2+20 in the climb (perhaps because a powerplant has failed) then use a pre-arranged level acceleration platform to pitch to level flight and accelerate there to V2+20 then retract the flap to get rid of the drag and accelerate further to Venr.
Who was throwing Occams razor at me earlier? Surely the method above is simpler that all that other fannying around because its exactly the same regardless of whether you lose an engine or not. Take off, call of "positive rate" - put the gear up and pitch to 15 degrees, accelerate to V2+20, call of "V2+20" - put the flaps up. If you have lost thrust and cant accelerate to V2+20 in the climb, use the Acceleration Altitude agreed prior (1500 feet) and speed up there.
as that bleeding meerkat says, simples!"
With that in mind, what if you pass V2 +20 while your gear is in transit, ie the lights have not gone out, do you still select flaps up?