The £225,000 advertising campaign, which was paid for by the Department of Work and Pensions, appeared in the free Metro newspaper, as well as on the Metro and Mail websites, in May and June this year
However, earlier this month the Advertising Standards Authority ruled that the print adverts were misleading, while the online versions did not make it clear enough they had been paid for by the DWP.
Jennifer Jones, from the Sheffield Disabled People Against Cuts, said the ruling made it clear the Government were using taxpayers money to lie to people.
Rivelin Valley Road Sheffield: Body found after police search of Rivelin Valley
The Long Blondes: Leadmill cancel gig after allegations surface against band creator Dorian Cox
Yorkshire Water announces hosepipe ban as Government prepares to declare drought in UK
Sheffield businessman Rong Ren ordered to pay £1.1m by courts over phones scam
She said: “They have spent public money on a bunch of lies. It is propaganda.
“The Metro have had almost a quarter of a million pounds of our money and I think they should answer to that.”
The deception came to light after an internal DWP memo was leaked to Jennifer who then sent it on to other anti-Universal Credit campaigners.
They then lodged a complaint with the ASA, who five months later banned the advert.
After the campaign was first rolled out, Jennifer and others removed hundreds of Metros from Sheffield railway station in protest at the adverts.
Other campaigners even delivered thousands of copies of the free newspaper to the door of then secretary of state Amber Rudd.
Jennifer, of Norfolk Park – who is disabled herself and also has a disabled son – says far from being fiscally neutral, Universal Credit is in reality a smokescreen for further reductions in state benefits.
“It looks on paper like it could be a panacea and it is sold like that – but Universal Credit is really a vehicle to roll out hidden cuts,” she said.