An advert claiming a basket of goods from one supermarket was £10 cheaper than a similar basket by Bradford-based Morrisons was misleading, the Advertising Standards Agency said today.

Market research by Asda checked the prices of the goods in at least two Morrisons stores and on-line, but because the goods were not purchased there were no receipts.

Some of the prices used to calculate the average basket prices were 12 weeks old. And data used for the advertisement did not take price promotions into account, the industry watchdog found.

The ASA found Asda to be in breach of the advertising code's clauses relating to substantiation, truthfulness and comparisons.

"We considered that, because Asda had included price data from 12 weeks before the ads appeared and because some of the prices used in the comparisons had changed, the ads were misleading," the ASA ruled.

Asda's poster said: "Asda saves you £10. Come in store and pocket the difference. Asda £64.03 Morrisons £74.35." It upheld six complaints about the advert and poster but dismissed a seventh which claimed the selection of goods in the basket had given Asda an artificial advantage.

Asda said its comparison had not included promotional prices and maintained that the prices used were correct. The chain denied including a discontinued Morrisons item.

Michael Bates, Morrisons marketing services director, said the company had been delighted at the outcome.

"Asda created an impression of pricing and competitiveness far removed from reality and they have now been challenged successfully," he said.

The ASA case is indicative of a price war hotting up between supermarkets across the UK.

Asda announced a plan to open 25 new stores this year, creating 7,000 jobs nationwide.

And last month, the firm, which is owned by American giant Wal-Mart, announced it was to spend a record amount of cash on cutting prices.

Simon Mowbray, news editor of industry magazine The Grocer price wars had been going on for years and "will be going on for years more".