A complaint over a Sussex council's promotion of a proposed housing stock transfer has been partly upheld.
Council homes in Crawley are staying under local authority control
The Advertising Standards Authority (ASA) said elements of a newsletter and DVD published by Crawley Borough Council could have misled tenants.
Two out of four separate points made in the complaint were upheld.
The council said it was "baffled and disappointed" by the ruling, as it felt the newsletter and DVD had been approved through the right channels.
From 2005 to early 2007 the local authority investigated the feasibility of transferring its stock of council homes to the control of a housing association.
It included consulting with tenants over a possible ballot.
'Checked and approved'
A newsletter headlined "Council faces £12m shortfall to reach Decent Homes Standard (DHS)" said the Crawley authority would not be able to meet a £60m figure which it claimed was the minimum spend required on housing stock by 2010.
But the ASA upheld a complaint that this figure was misleading, because it included future maintenance costs beyond DHS guidance.
A second point of complaint concerned a promotional DVD which questioned the reliability of other information being disseminated at the time by the Defend Council Housing group.
The ASA concluded the material "unfairly denigrated" the aims of the group, which campaigned against the housing transfer.
Two further parts of the complaint were not upheld - one concerning claims about opposition groups in the newsletter, and the other about the housing association's predicted revenue.
Crawley council said: "We're baffled because everything was checked and approved by the relevant parties in line with government guidelines."
Plans for a ballot over a proposed transfer were shelved in January, and the council said it was now concentrating on "a major programme of improvements... to help us meet the Decent Homes Standard".