Preheat oven to 400°F. This can also be done on a grill preheated to 400°F. If cooking outdoors without a thermometer and over an open flame, cook time may vary slightly.
Place the potatoes onto a large square of aluminum foil. Drizzle the potatoes and tomatoes with the olive oil and season with the Italian seasoning, crushed red chili flakes, salt and pepper.
Wrap the foil around the food by creating an envelope-style fold over the top and rolling the edges up . This will make it easier to check the contents of the packet and will make for easy serving.
Place the foil pouch into the oven or over the campfire on a grate. Allow the packet to cook for about 25 minutes or until the potatoes are tender. It's important to rotate the foil packet around the heat from time to time to prevent scorching.
To finish the dish, top the potatoes and tomatoes with the shredded mozzarella cheese and place back on the heat to allow the cheese to melt. Layer the pepperoni on top and sprinkle with basil before serving.