Friends of the Earth (FoE) has agreed to withdraw an anti-fracking leaflet that made misleading claims about the environmental and social costs of extracting shale gas. The charity has agreed not to repeat unsubstantiated claims that fracking involves the use of cancer-causing chemicals or causes house prices to plummet, the Advertising Standards Authority (ASA) said.

The leaflet also showed a picture of Grasmere in the Lake District emblazoned with the words "Don't let fracking destroy all of this". But it was pointed out by Michael Roberts, a retired geologist who complained to the ASA, that Grasmere is a volcanic landscape and contains no coal, oil or gas.

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Roberts and another individual complained to the ASA along with Cuadrilla, the energy firm that has been given governmental permission to frack in Lancashire. Francis Egan, chief executive of Cuadrilla, said: "FoE's repeated falsehoods have been exposed as nothing more than scaremongering designed to frighten the public into giving it money. It is the unacceptable face of the charity sector."

FoE was keen to point out that it had reached an agreement with the ASA rather than losing a settlement. It has vowed to continue campaigning against fracking and maintain that it is detrimental to the environment.

An ASA spokesman said: "We approached Friends of the Earth with the concerns that had been raised about its ad. The advertiser agreed not to repeat the claims, or claims that had the same meaning. On that basis we closed the case informally. The ad must not appear again in its current form."

Cuadrilla is planning to start constructing a shale gas exploration site near Blackpool this month, with fracking due to start there in the autumn. In October 2016 the government overruled Lancashire County Council, which had rejected Cuadrilla's plans to drill and frack four wells at Preston New Road.

Protest against the government's action has been raucous. Most notably, a collective of highly vocal, brightly dressed women known as the 'Nanas' have been manning the front line with their children and grandchildren.

FoE's Donna Hume claimed Cuadrilla had complained to the ASA in order to "distract from the real issues about fracking". She added: "We continue to campaign against fracking, alongside local people, because the process of exploring for and extracting shale gas is inherently risky for the environment.

Meanwhile, a large anti-fracking camp has set up in Kirby Misperton, North Yorkshire. The camp was set up days after the High Court rejected an attempt to overturn fracking permission granted to the energy company Third Energy.