Communication Breakdown; Situational Awareness
ATC Issue All Types; Conflict Airborne Conflict
Air Traffic Control Issued New Clearance
Human Factors; Procedure
On final visual approach to Runway 16 ECP; at 600 FT and 3 miles and cleared to land; a banner towing aircraft flying over the airport terminal on a downwind course was cleared by the Tower to pickup his banner.  The banner pickup location is between Taxiway D and Runway 34 between M and K approximately 50-75 FT from the runway.  At that point; the banner towing aircraft turned left directly into our flight path.  I had spotted the aircraft flying over the field before he was cleared to pick up his banner and was monitoring his position.  I also noted that his aircraft was not displayed on the TCAS and that he probably did not have a transponder.  As the aircraft started to turn I asked the Captain if he saw the other aircraft and did it look like he was turning in front of us.  At that point; the Captain initiated a go-around climbing and turning to the right.  I informed the Tower that we were going around because of the banner towing aircraft to which the Controller replied that the other aircraft really wasn't in the way.  We were issued instructions for a right 180 and cleared for another visual to 34.  We landed without further incident.  The Tower Controller never informed us of the other aircraft's presence.  I believe Tower made an error clearing him to pick up his banner while we were on final due to non transponder equipped aircraft operating in close proximity to the active runway.  ATC Tower Control not paying attention.
Air Carrier landing ECP reported a developing conflict event with a banner tow aircraft near the landing runway. The reporter claimed ATC services were inadequate.