A private health insurance company has been forced to take down an advert from its website after it tried to sell its products by claiming that the NHS had been responsible for 13,000 needless deaths since 2005.

The claim, made by Bestmedicalcover, was found by the Advertising Standards Authority (ASA) to have used an “appeal to fear to sell private health insurance and that it was not justified to do so”.

The company, based in the British Virgin Islands, had cited a recent report by the medical director of NHS England, Sir Bruce Keogh, which it said had found that a “staggering 13,000” deaths in hospitals were likely to be due to negligence.

The advert added that health insurance could “provide peace of mind” and “quite literally save your life”.

The figures cited were not part of Keogh’s report, which actually said it would be misleading to attempt to provide such statistics.

But the claim that 13,000 people had needlessly died did appear in some newspapers’ coverage of Keogh’s investigation into 14 NHS hospital trusts in the days before the report was published.

Labour has claimed that Conservative spin doctors were behind a pre-briefing of Keogh’s report, which led to the erroneous claims being aired in the public domain, an allegation denied by the health secretary, Jeremy Hunt.

The shadow health secretary, Andy Burnham, has accused the government of running the service down in order to privatise its services.

The ruling by the ASA, due to be published after the Tory party conference but leaked to the Observer, said that it received 54 complaints about the advertisement.

The ASA ruled that the advert must not appear again and e-Smart Media, the company trading under the Bestmedicalcover name, was told to ensure that it use “robust substantiation to support claims” in future.

One of the complainants, a senior doctor in the NHS, told the Observer: “The advertisement was a deliberate attempt to frighten vulnerable people into taking out unnecessary private health insurance. It misused dodgy statistics to attack the NHS and try and scare people into taking out insurance policies. It also suggested that patients using private care would run less risk of being contaminated by other patients.

“It is, unfortunately, typical of the current attempts to undermine the NHS and create profit-making opportunities for private-sector entrepreneurs.”

Last week at the Labour party conference, Burnham, in a well-received speech to delegates in Brighton, said the coalition’s Health and Social Care Act had put the NHS on a fast track to fragmentation.

He further claimed that the NHS was being privatised with huge private health firms run by people who had donated £1.5mn to the Tories  winning £1.5bn in NHS contracts.