The ad, which featured on the product website, read: "Although the vapour inhaled and exhaled when using Nicolite resembles smoke, it's simply a completely harmless vapour.
"The vapour has no odour and does not linger the way tobacco smoke does. So there's no danger of passive smoking posed to those around 'vapers', as e-cig users are called. It's the tobacco that's harmful, not the nicotine, which is mildly addictive but poses no health hazard."
A complaint about the advert prompted an investigation by the advertising watchdog, and was subsequently banned.
Manufacturers Nicocigs insisted the ingredients used in the cigarettes had been tested in the UK and had passed a toxicology risk assessment.
Defending the wording of the ad, Nicocigs claimed the product contained the same pharmaceutical grade nicotine as other quit smoking aids like patches and gum, and pointed out that previous research showed that nicotine was not the cause of smoking related health problems.
But an ASA spokesman said the "small scale" of the study referred to by Nicocigs, as well as the fact that it involved children rather than adults, was of concern.
According to the Daily Mail, the spokesman said: "In addition, we noted the toxicology risk assessment, which also did not take the form of a controlled clinical trial, concluded that the e-cigarette was unlikely to pose a risk to health over and above that of cigarettes."
The ASA went on to suggest that claims the product "poses no health hazard" were both unsubstantiated and misleading.
Nicocigs were forced to remove the ad permanently and warned to ensure such claims were not made in the future without "adequate evidence".
Have you tried electronic cigarettes to quit smoking? Did you have any health concerns about them? Leave your comments below...