The Breathe Clean Air Group, which opposes Peel Energy's planned biomass plant in Trafford has withdrawn campaign literature after a complaint by Peel to the Advertising Standards Authority.
The literature, which has already been circulated to local residents, was withdrawn from further distribution by BCAG before a formal investigation was needed by ASA.
Jon England, project manager at Peel Energy, said: "We are pleased that the material has been withdrawn following our complaint as we considered it to be completely misleading. The protest group has agreed to withdraw its material following advice from the ASA rather than challenge our assertions at a full ASA Council meeting.
"We hope that local politicians and members of the community who have formed their opposition to our proposal based on misinformation distributed by BCAG will now reconsider their views."
Peel submitted a planning application to Trafford Council for a £70m electricity power station late last year. The biomass-fired plant would burn recycled wood from construction and demolition sites, virgin timber residue from forestry processes, surplus agricultural matter such as straw or grain husks and energy crops, coppiced willow and miscanthus. The power station could be operational by mid-2014 and supply 37,000 homes.
England added: "Our complaints to the ASA centred on inaccurate and inflammatory statements made by the protest group about issues such as air quality and public health. It is our belief that many people in Davyhulme, Urmston and other areas have been caused unnecessary concern by unsubstantiated claims made in the BCAG literature.
"We once again urge to listen to our proposals to develop a modern power plant that will deliver safe and reliable low carbon energy to the local area. Electricity is not something that should be taken for granted at a time when demand is increasing and many existing power generation facilities are scheduled to close."