Budget retailer Poundland has caused uproar with a controversial social media advert.

The popular chain has been running an online ad campaign throughout the festive period featuring an 'Elf on the Shelf' alongside products available to buy in its hundreds of stores.

But on Thursday, the official Poundland Twitter account posted an image showing the elf suggestively dangling a teabag in the face of a female doll - and it was captioned 'How do you take your tea? One lump or two?'

A box of Twinings teabags was used for the cheeky double entrendre, but this product has since disappeared from the ad after the company complained that the image 'misuses our product'.

An updated ad was posted just a few hours later, captioned 'Spot the difference?'.

The naughty image has provoked outrage among some customers and praise from others for its 'ballsy' campaign, the Liverpool ECHO reports.

Katherine Sullivan tweeted: “Sex pest the elf? Not cool,” while @FutureJonny tweeted: “Yeah, I’m not a prude but this is a little too far. Honestly these elf things are in pretty poor taste.”

Dr Clare Smith couldn’t believe the image had been approved, tweeting: “Seriously someone approved this image? Please explain how this can be seen as acceptable?.”

@HiHungryHarriot tweeted: “U OK @Poundland hun?,” while Julie O’Grady added: “This s*** is offensive. Well out of order @Poundland."

One person even believed the account may have been hacked, Tweeting: “Has Poundland been hacked? Their recent adverts on here have been in rather poor taste..”

But some people found the post funny and commended Poundland's social media team.

Andi Rush joked: “Absolutely disgusted by this, poor taste! Earl Grey should’ve been used instead.”

@Scouse_pickle added: “Not sure what is going on with Poundland but it’s boss.”

While James Jones said: “The new Poundland marketing campaign, it’s pretty ballsy..”

When approached by the ECHO for comment on whether the so-called ‘sex pest elf’ was appropriate for a Christmas advert, the company’s marketing director said they’re “proud” of the campaign.

Mark Pym said: “If you think this is edgy, you should see the ones we didn’t post. The love on Facebook is overwhelming - that’s because it connects with our shoppers.

“In fact, we’re proud of a campaign that’s only cost £25.53 and is being touted as the winning marketing campaign this Christmas.”

What do you think of the ad? Let us know in the comments below or tweet us @ChesterChron.