Microsoft has blamed an “error in our system” for producing results on its Bing search engine that appear to censor information for Chinese language users in the same way it filters results in mainland China.

The admission is an embarrassment for Microsoft, which is making a major push to expand its business in China and has just appointed a new CEO, Satya Nadella, who has been a public critic of government surveillance in the US.

On Tuesday, campaigners at FreeWeibo, a tool that allows uncensored search of Chinese blogs, revealed that Bing returns radically different results in the US for English and simplified Chinese language searches on a series of controversial terms, including “Dalai Lama”, “June 4 incident” (how Chinese people refer to the Tiananmen Square protests of 1989) and “Bo Xilai”, the former high-flying government official now serving life in prison for corruption.

After initially declining to comment, Microsoft’s Stefan Weitz, a senior director at Bing, issued a statement denying censorship. Weitz said Microsoft had conducted an investigation into the discrepancies.

“First, Bing does not apply China’s legal requirements to searches conducted outside of China. Due to an error in our system, we triggered an incorrect results removal notification for some searches noted in the report but the results themselves are and were unaltered outside of China,” he wrote.

FreeWeibo’s homepage was also removed for Chinese language users. Weitz said the site had been cut because “at some time in the past the page was marked as inappropriate due to low quality or adult content.” Weitz said it had now been restored.

Charlie Smith at FreeWeibo said Weitz’s explanation was “simply not true that the results ‘are and were unaltered outside of China’.”

Smith said: “Anybody, anywhere, can run independent tests themselves to verify our claims and see that Microsoft is quite simply trying to cover up their complicit involvement in China’s attempts to cleanse the web of any negative information about the Middle Kingdom.”

Dalai Lama search in English

Dalai Lama search in Chinese

Smith said that before he published his blogpost on the discrepancies on greatfire.org he had given Microsoft four days to check to see if there was a technical error. “Their first answer was ‘no comment’, but now they believe that there is a partial error on their part. But we have checked our tests to see if an error is to blame and the results are in: ‘Computer says no!’”

“We also believe that this is the perfect time for Microsoft to drop its excessive global censorship policy on any version outside of China and international Bing inside China.

“This story shines a negative light on both Microsoft and China. We fully expect the Chinese authorities to continue with their draconian censorship practice. But for Microsoft, this is an enormous opportunity – do the right thing and stand up to Chinese censorship now. It has damaged your credibility with customers,” he said.

Weitz said: “Bing aims to provide a robust set of high-quality, relevant search results to our users. In doing so, Bing has extremely high standards that respect human rights, privacy and freedom of expression.

Weitz said Microsoft is a signatory to the Global Network Initiative, an effort by a companies, human rights groups and academics to protect and advance freedom of expression and privacy on the internet. “As part of our commitment to GNI, Microsoft follows a strict set of internal procedures for how we respond to specific demands from governments requiring us to block access to content. We apply these principles carefully and thoughtfully to our Bing version for the People’s Republic of China,” he said.

John Kamm, the founder of human rights in China organisation Dui Hua, said: “This is not good, but it shouldn’t surprise anyone. I’ve always felt that large corporations will defer to China. It’s not as if they are doing their bidding, but they make decisions because they think that’s what China wants.”

It is not the first time Bing has been accused of censoring search results outside China. In 2009, New York Times columnist Nicholas Kristof wrote that Bing searches in simplified Chinese characters produced “sanitized pro-communist results. This is especially true of image searches. Magic! No Tiananmen Square massacre. The Dalai Lama becomes an oppressor. Falun Gong believers are villains, not victims.”

Microsoft told the columnist the discrepancies were due to “a bug of some kind and that that is fixed”. It said the “explanation lies in the search algorithms, rather than in Microsoft policy.”

• This story was updated on Wednesday 12 February to clarify that the searches were made using simplified Chinese language characters on Google and Bing.