Of Irish-English origin, the colloquial phrase witches’ knickers denotes discarded plastic bags or shreds of plastic bags that have become snagged in trees, hedges, etc.

The image is of a witch’s undergarment that got caught in a tree or a hedge when she was flying.

The earliest occurrences of the phrase witches’ knickers that I have found are as follows, in chronological order:

1-: From The Irish Times (Dublin, County Dublin, Ireland) of Saturday 23^rd December 2000:

Degradable witches’ knickers
Katharine Blake

[…]
Originally from Thomastown, Co Kilkenny, Robinson was sent to boarding school in Greenwich at the age of eight and has lived in England ever since. He has been working solely with plastic and mostly with retailers here and in Britain for the past 10 years. He has worked with ICI, BP and British Polythene Industries, from where he was seconded to work with Irish Polythene Industries.
He now works with Symphony Plastics in Hertfordshire, the company behind the technology which produced the degradable carrier bag. Robinson is one of the chemists responsible for the concept of a “Bag for Life”, which he sees as a limited success. […]
[…]
Irish retailers alone use almost 300,000 tons of plastic a year, one-third of which is categorised under “not for resale”—which includes all the plastic wrapping on goods. Two-thirds of this is plastic carrier bags, which end up in landfill or blowing about in trees and hedges (now known colloquially as “witches knickers”). When visiting Ireland over the years, Robinson was struck by the amount of plastic in hedgerows. “It’s like modern-day tumbleweed,” he says, “and there is a lot of it around. That’s one of the reasons why we are launching the degradable bag here.”

2-: From The Guardian (London and Manchester, England) of Wednesday 12^th February 2003:

At last, an edible form of tapioca—in the shape of a carrier bag
Felicity Lawrence Consumer affairs correspondent

Tapioca, the grey porridge loathed by schoolchildren, has been remoulded in a heroic role—as a fully biodegradable plastic bag.
Sainsbury’s will launch the carrier bag, made from tapioca starch, in April.
The new bags biodegrade when composted in 28 days. Conventional plastic bags, made of polyethylene, do not degrade and have become a serious source of pollution.
Between 10bn and 15bn carrier bags are used in the UK each year, with the average household working its way through 323 of them, according to government figures. They frequently end up clogging rivers and drains and harming wildlife or being blown up into trees, acquiring the name “witches’ knickers”.

3-: From Bags in Trees: A Retrospective, by Ian Frazier, published in The New Yorker (New York City, New York) of 4^th January 2004:

An aid worker just back from Africa tells us that there’s a lot of debris in trees in the poorer parts of Africa, and the closer you get to the supposed epicenter of the AIDS epidemic the more of it there is. An Irishwoman says that in Ireland bags in trees are called “witches’ knickers.” A resident of the Upper East Side writes to tell us that ever since some balloons got stuck in a tree outside her bedroom window her family has had bad luck with health.

4-: From Keeping Sumter Beautiful, by Amanda McNulty, Clemson Extension Agent, published in The Item (Sumter, South Carolina) of Monday 1^st March 2004:

As beautiful as deciduous trees are with their silhouettes and branching patterns etched across the sky, they sure do also serve as the perfect outdoor advertising panel for those ubiquitous plastic shopping bags that grocery, drug, and every other kind of store put your purchase in. When these bags fly out the window of a car, catch a ride on a stray breeze, and finally alight in the branches of a tree, they are called “witches’ knickers.” Well, there must be harridans of all descriptions with mighty airy bottoms riding their broomsticks over Sumter County, ‘cause there sure are plenty of their supposed undergarments dangling from trees and ruining what would otherwise be a lovely winter woodland view.
What to do? Alas, no one has figured out a way to get all people to floss, neuter their pets, or stop littering. Sumter Magistrates are supporting law enforcement officers who put together a good case on illegal dumping, and offenders get fines and community service. But again, who is going to get those witches’ knickers out of trees?

5-: From The Times-Picayune (New Orleans, Louisiana) of Thursday 21^st October 2004:

Blight of bags bringing bans
Plastic packs landfill, harms environment
By Margie Wylie
Newhouse News Service

Alaskans call them “tundra ghosts” and “landfill snowbirds.” In China they’re “white pollution.” South Africans have sarcastically dubbed them their “national flower.” Snagged in treetops in Ireland, they become “witches’ knickers.”
Since their introduction in the 1970s, handled plastic carry bags have become the world’s favorite way to tote purchases. Light, cheap, strong, waterproof and durable, as many as a trillion are used each year. Most are trashed, a tiny fraction are recycled and a good many are littered or break free of waste bins and landfills.

6-: From Keeping Sumter Beautiful, by Amanda McNulty, Clemson Extension Agent, published in The Item (Sumter, South Carolina) of Monday 22^nd November 2004:

If you are one of my six loyal readers, you will remember that “witches knickers” are those absolutely ubiquitous plastic bags that somehow end up hanging from trees, as if a low-flying harridan caught her undergarments on a protruding branch.