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California regulators have barred Cruise’s autonomous vehicles from the state’s roads and accused the company of misrepresenting details about an accident, dealing a sharp setback for the General Motors-owned company less than three months after it won the right to operate a full robotaxi service in San Francisco.

Cruise’s cars were “not safe for the public’s operation”, California’s Department of Motor Vehicles said as it announced it was revoking permits for Cruise to test and deploy its vehicles on public streets. It also accused the company of having “misrepresented” details of an accident earlier this month in which a pedestrian was dragged 20ft under one of its cars.

The action follows a DMV investigation into the accident, in which a pedestrian on a crosswalk in San Francisco was hit by another vehicle and thrown into the path of one of Cruise’s driverless cars. The car came to a complete stop with the pedestrian trapped underneath, before attempting a subsequent “pullover manoeuvre” that the DMV said had lasted seven seconds and involved dragging the pedestrian another 20ft, according to an order of suspension issued by the agency.

According to the DMV’s order, Cruise representatives did not reveal the pullover manoeuvre when meeting the DMV and California Highway Patrol the next day. Instead, they only provided video from the car’s on-board camera showing the initial collision with the pedestrian and did not disclose the car’s subsequent movement.

In a blog post, Cruise confirmed details of the accident and said it had “proactively shared” information with the DMV and other regulators, including the full video. A spokesperson later added that Cruise “showed [the DMV] the complete video multiple times” at the meeting described by the regulators.

The company claimed the 460 milliseconds its car had taken to respond to the incident had been “faster than most human drivers”. But it described the accident as “an exceedingly rare event” that had not been included in any of the scenarios outlined by regulators or insurance industry bodies, nor come up in its “millions of miles of training and simulations”.

Cruise also said its car was designed to carry out the pullover manoeuvre, which led to the pedestrian being dragged under the car, “to the extent possible within the driving context”, adding that California regulations required the car to be put into a “minimal risk condition”. It added that the accident would be included in future training to help its cars decide whether to pull over or stay in place.

Cruise’s fully autonomous cars, based on GM’s Chevrolet Bolt, had become a familiar sight on San Francisco streets in recent months, particularly in the evening when the company operated a fleet of 300 vehicles.

The GM unit scored an important breakthrough in early August when California’s public utilities commission granted it and Waymo, Alphabet’s autonomous car company, the right to run full-scale driverless taxi services throughout San Francisco without any restrictions.

Less than two weeks later, the DMV announced an investigation into a number of accidents involving Cruise’s vehicles and ordered the company to halve the size of its fleet immediately. The incidents include a collision between a Cruise car and a fire truck, in which Cruise said its car had been able to identify the truck in an oncoming lane and tried to brake, but had been unable to prevent a collision.

California’s decision in August to give fully driverless taxis free run of San Francisco’s streets came despite widespread opposition from city officials and public interest groups. Critics argued that cars without humans behind the wheel had not been tested widely enough to remove all restrictions in the city. They also pointed to earlier incidents in which autonomous cars had obstructed emergency vehicles, presenting a possible safety hazard.

The DMV said it had the right to “immediately suspend or revoke permits” if it decided “there is an unreasonable risk to public safety”. It added that there was “no set time for a suspension”.