The Home Office's controversial 'go home' immigration van campaign will have to be redesigned, the advertising watchdog has ordered.
The government said it would comply with the Advertising Standards Authority, which said the billboard, aimed at illegal immigrants and towed around London, "must not appear again in its current form".
This was because of the "misleading" use of arrest statistics included on the posters.
But the ASA also ruled that while the language used in the campaign was "distasteful to some", it was not "offensive or harmful".
The campaign, which sparked an outcry from anti-racism campaigners and was branded "stupid and offensive" by Vince Cable, involved poster-clad vans driving through six London boroughs between July 22 and July 28, stating: "In the UK illegally? Go home or face arrest."
Green text in the style of an official stamp stated "106 arrests last week in your area".
It drew 224 complaints to the ASA, including some from groups representing migrants in the UK, legal academics and the Labour peer Lord Lipsey.
Most of the complaints focused on the language used, while others questioned how the '106 arrests' statistic could be accurate when the vans were being driven around different areas.
Small print at the bottom of the poster said the arrest figures were from the period June 30 to July 6 and covered Barking and Dagenham, Redbridge, Barnet, Brent, Ealing and Hounslow.
The ASA said it acknowledged that the phrase "go home" was reminiscent of slogans used in the past to attack immigrants to the UK, but was generally used in that context as a standalone phrase or accompanied by racially derogatory language.
In its ruling, it said: "We recognised that the poster, and the phrase "go home" in particular, were likely to be distasteful to some in the context of an ad addressed to illegal immigrants, irrespective of the overall message conveyed, and we recognised that wording less likely to produce that response, such as "return home" could have been used.
"However, we concluded that the poster was unlikely to cause serious or widespread offence or distress."
But it said the arrest claims was "misleading and had not been substantiated."
ASA chief executive Guy Parker said: "Although distasteful to some, we've ruled that the Home Office ad wasn't offensive or harmful. But it was misleading.
"All advertisers, including Government, have to stick to the rules so we can trust the ads we see and hear."
A Home Office spokeswoman said: "We are pleased the ASA have concluded that our pilot was neither offensive nor irresponsible.
"We have always been clear that this campaign was about encouraging illegal immigrants to leave the country voluntarily and was not targeted at particular racial or ethnic groups.
"In respect of the ASA's other findings, we can confirm that the poster will not be used again in its current format."
Lord Lipsey said: "This ruling convicts the Government of misleading the public. Taxpayers' hard-earned cash has been squandered on paying for Government ads which tell porkies.
"I do not ask for (Home Secretary) Theresa May to resign. I ask for her to apologise, fully and frankly and if possible sincerely, for the outrage that she and her department have perpetrated."