Friends of the Earth (FOE) misled the public in a leaflet which claimed fracking can cause cancer, the advertising watchdog has said.
The fundraising flyer also featured a photo of Grasmere in the Lake District – despite there being no plans for fracking in the area.
A draft report from the the Advertising Standards Agency (ASA) said the charity failed to substantiate its claims about the dangers of the process.
FOE said they “would not be silenced”.
The provisional ruling, which was apparently leaked to The Times newspaper, was produced after the ASA received a complaint from energy firm Cuadrilla.
The BBC understands the watchdog found the group had breached its code by failing to substantiate “misleading statements”.
FOE had claimed 25% of chemicals used during the fracking process could cause cancer, and suggested there was a risk of contamination to drinking water.
Campaigner Tony Bosworth said the ASA had not yet made a final decision, and FOE had submitted more information to the watchdog.
“The bottom line is that the evidence against fracking is clear: it poses a risk to people’s health and the environment,” he said.
An ASA spokesperson said the watchdog would publish its complete findings in due course.
Fracking – or hydraulic fracturing – was suspended in the UK in 2011 following earth tremors in Blackpool, where Cuadrilla previously drilled.
The first fracking operation since the ban was approved earlier this year for a site in North Yorkshire.
The government is expected to make a final decision by 6 October on whether two sites in Lancashire – Preston New Road and Roseacre Wood – can be test fracked for shale gas.
The decision is significant because Cuadrilla wants to carry out unconventional fracking – that means drilling wells vertically and horizontally – which has never been done before on mainland Britain.
All copyrights for this article are reserved to bbc business