Conservative activists in India have pledged to continue their campaign to purge bookshelves and schools of works they say are abusive to Hinduism, as a fierce row over a 700-page academic work on the faith intensified on Thursday.

Penguin Books India agreed this week to withdraw from sale and pulp all copies of The Hindus: An Alternative History, by the US-based academic Wendy Doniger, as part of a settlement after a group of Hindu conservative nationalists filed a case against the publisher.

"We are going to fight each and every example of this. We will leave nothing unchallenged that is against our customs, our religion, our nation," said Prakash Sharma, spokesman for the hardline Vishva Hindu Parishad (VHP) organisation, one of a series of conservative religious groups in India that aggressively campaign against artists and authors who they believe malign or misrepresent Hinduism.

Arundhati Roy says she is uncertain as to whether she'll stay with Penguin. Photograph: Sarah Lee for the Guardian

Penguin's decision not to fight the case has worried many authors, and revealed deep cultural divisions. Arundhati Roy, who won the Booker prize in 1997 for her novel The God of Small Things, said she was shocked by Penguin's decision and uncertain whether to stay with the publisher. "So far I have had been more than happy to be published by Penguin. But now? What you have done affects us all," Roy wrote.

An editorial in the Times of India condemned "the growing power of bullying self-appointed censors" displaying "a Victorian hangover with a Taliban temperament".

Advaita Kala, a screenwriter and novelist, said: "It's very intimidating to be a writer in India. There is almost no legal protection. We are left almost completely on our own. And the worst offenders are not the fringe groups but the politicians." International authors have also expressed concerns.

Sharma refused to say whether his group was formally linked to Dinanath Batra, the educationalist who started the campaign against the book in 2011, as has been reported in the Indian press. Batra heads a group that campaigns to force educational authorities to remove "objectionable" passages from school textbooks and drop entire works from university reading lists.

Batra has also launched legal actions against sex education in schools, which he says is against Hindu culture, and against a magazine article about Hindu militancy. The 84-year-old former teacher has said he will now try to force the withdrawal of a second book by Doniger.

Wendy Doniger. Photograph: Rick Friedman/Corbis

In the withdrawn work, Doniger, 73, a professor at the University of Chicago divinity school, emphasises the importance of women, sexuality and those at the bottom of India's caste hierarchy in Hinduism. The book drew criticism from conservative Hindus and some scholars when it was published in 2010, but also received many positive reviews.

Batra's complaint against Doniger accused her of being motivated by a "Christian missionary zeal and hidden agenda to denigrate Hindus". She was "a woman hungry of sex", it said, and claimed the book was "riddled with heresies and factual inaccuracies".

Religious conservatives and other hardliners in India have made frequent use of laws, many dating from the colonial era, that critics say fail to adequately protect artists and researchers.

In 2003, a book on the Hindu god Ganesh by one of Doniger's students was withdrawn after pressure from conservatives. In 2006, the painter MF Husain fled India after a show of nude Indian gods and goddesses led to a charge of "hurting the sentiments of the people". In 2010, a university in Mumbai was forced to drop a work by the Indian author Rohinton Mistry, and the ruling Congress party tried to suppress a biography of Sonia Gandhi they claimed was inaccurate.

This latest row is taking place at a time of high tension. Elections must be held before May and will pit the Congress party, hit by corruption scandals and flagging economic growth, against the Hindu nationalist Bharatiya Janata party (BJP), led by Narendra Modi.

The legal notice against Penguin accused Doniger of incorrectly describing the Rashtriya Swayamsevak Sangh (RSS), India's largest Hindu nationalist organisation, as the BJP's militant wing, and wrongly telling readers that the RSS was behind the assassination of Mahatma Gandhi. The RSS pre-dates the BJP by many decades, and the killer of Gandhi was a former but not serving RSS activist. The notice says a judicial commission had exonerated the RSS of any complicity in the murder.

This row has added significance as the election nears. Modi, who consistently tops opinion polls, joined the RSS as a child and spent decades in its service.

Roy wrote: "The elections are still a few months away. The fascists are, thus far, only campaigning. Yes, it's looking bad, but they are not in power. Not yet. And you've already succumbed?"

Mainstream politicians have largely avoided commenting on the row. Balbir Punj, a vice-president of the BJP, who is seen as close to Modi, said that in principle books should not be banned. "Hinduism [and] India believes in an open discussion. None should be banned. But there needs to be a uniform principle for everybody, not double standards."

Salman Rushdie's 1988 novel The Satanic Verses, which many Muslims deemed blasphemous, remains proscribed in India, and an appearance by the author at the Jaipur literary festival in 2012 was cancelled for security reasons after Muslim organisations protested.

In a statement, Doniger said she was "deeply troubled … for free speech in India in the present, and steadily worsening, political climate" but also "glad that, in the age of the internet, it is no longer possible to suppress a book."

Shortly after news broke of the withdrawal, The Hindus had reached 33 on Amazon's bestseller list, and topped the Hinduism section. Penguin refused to comment on Thursday.