A big budget TV campaign promoting BSkyB's on-demand service Sky Anytime+ has been banned by the advertising watchdog after rival Virgin Media complained that it misled consumers by telling them it was free.

The TV campaign featured a number of characters from the fictional court of Camelot – including King Arthur, Merlin and Guinevere – explaining the benefits of Sky Anytime+ for watching films and TV series box sets but "T'will not cost us one penny more".

The Advertising Standards Authority received a complaint from pay-TV rival Virgin Media, which has an ongoing tit-for-tat advertising complaints battle with BSkyB, that the ad was misleading.

Virgin Media argued that in order to watch films on the on-demand service, subscribers had to be signed up to a Sky Movies package which comes at an additional cost.

BSkyB said the complaint should be dismissed because it ran an on-screen text message explaining that access to content on Sky Anytime+ "depends on Sky TV subscription".

But the ASA said the ad "gave a misleading impression of what was being offered". It banned the TV ad for breaching the advertising codes on the grounds of exaggeration and for misleading consumers.

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