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British Gas has been rebuked by the UK's advertising watchdog after being found to have overstated its own price cuts in a newspaper advert.

The Advertising Standards Authority (ASA) has warned the energy firm not to repeat the mistakes made in the national press ad.

In the offending ad, which was launched earlier this year, the main text read: "£207 – Only British Gas has cut prices twice this year…"

Accompanying small print clarified: "Applies to both standard gas and domestic electricity prices".

The ASA was compelled to act after receiving eight complaints on the ad, including one from rival Powergen, which said it had cut prices for its gas guarantee customers three times during February and April 2007.

Responding to the claims that its advert has misled consumers, British Gas insisted it had "taken the actions of their competitors into account".

The company said it believed it had "made clear that the claim did not apply to non-standard products such as Powergen's gas guarantee or nPower's online prices", but instead to dual cuts to standard gas and domestic electricity tariffs made at the same time.

But in explaining its decision to uphold the complaints the ASA said in a statement: "The ASA noted British Gas' explanation that the small print made clear that the claim applied to standard products only.

"However, we considered that the implication of the headline claim, especially in conjunction with the body copy that referred to 'all our customers', was that British Gas customers were the only ones to have benefited from two price cuts and that the savings applied to all British Gas customers."

The ASA said it was "concerned" that competitors were excluded from the comparisons, with the ad's small print deemed "insufficient" for communicating its message.

"We concluded that readers would infer from the headline claim 'Only British Gas has cut prices twice this year' that all British Gas prices had been reduced twice in 2007 and also that no competitor's customers had benefited from two price cuts," the statement continued.

"Because that was not true, we concluded that the ad was likely to mislead."