Dr Richard Dixon, who is both a board member at the Scottish Environment Protection Agency (Sepa) and director of Friends of the Earth Scotland, said Dart Energy accused him of a conflict of interest after he took to Twitter to launch an attack on the firm's plans to drill 22 wells at 14 sites at Airth and in the Forth Valley.
Dr Dixon was contacted by the company's lawyers over his tweets, which used an image of the Dart Energy logo but changed it to read: "Daft Energy: You'd be daft to invest in us."
The firm was also concerned about claims that it was 'desperate' to raise finance in Australia.
He said the company demanded he stop tweeting about it and threatened him with legal action if he did not sign a letter stating he would comply, remove any tweets from his Twitter feed relating to Dart and refrain from posting any further comments about its activities.
Dart Energy is currently waiting on the Scottish Government to rule on its plans, which have been fiercely opposed by 2500 people in the area and Friends of the Earth Scotland.
However, the threat of legal action was lifted after Dr Dixon wrote to Dart to inform them he always declares an interest at Sepa board meetings if there is an agenda item related to an active campaign of Friends of the Earth Scotland.
He said: "It's a pretty scary experience to be faced with legal action from a multimillion-pound company. This attempt to gag my comments has backfired and instead it has brought the issues relating to fracking and coal bed methane extraction in Scotland to a larger audience.
"I received a letter from Dart which was a climbdown on their previous correspondence and stated that since I was tweeting on behalf of Friends of the Earth Scotland they would not pursue the matter further.
"Many more people have now learned about our campaign and opposition to their proposals for coal bed methane extraction than if they had never got in touch threatening me with legal action.
He added: "This is an embarrassing climb-down for Dart and a victory for campaigners everywhere, Friends of the Earth Scotland and also freedom of speech."
A spokesman for Dart Energy said the letter was addressed to Dr Dixon personally in relation to his board membership of Sepa and was not a matter for Friends of the Earth Scotland.
He said: "The letter was only sent to the Friends of the Earth Scotland address as we did not have his personal address.
"A close inspection of the letter from Levy & McRae will make clear that Dart Energy's concerns were with regard to his position on the board of Sepa and had nothing to do with his role at Friends of the Earth Scotland."
He added: "That Richard Dixon has chosen to widely publicise the "private and confidential" correspondence as an attack on Friends of the Earth Scotland amply demonstrates the acute level of his personal antipathy towards Dart Energy and is further evidence of why we questioned his conflicted position with regard to discussions about Dart Energy's licences as a Board Member of Sepa."
Sepa said it was aware of Dr Dixon's association with FoE Scotland and that a full list of all its board members' interests was on its website.
The statement added: "Dr Dixon, like all board members in public bodies, has a duty to ensure that any interests are declared openly." It said they are recorded on its website.