The note said the pupils would work with teachers to deliver the flyers, which aimed to "gauge what you as a community would like in a local family restaurant and bar".
The flyers were meant to be delivered on Monday but the activity was postponed because of rain.
However, when contacted yesterday morning, Ms Carberry said the exercise had been cancelled because of complaints from three families.
A mother of two pupils, who did not want to be named, said the activity was completely inappropriate, especially as the children were aged 10-13.
She said children promoting a business that sold alcohol was "just wrong", particularly given last week's vote on the drinking age.
"If you're trying to send messages out about young people and alcohol and the relationship with alcohol and the alcohol industry - aren't you starting quite young and giving this opposite message?"
She said she would not support pupils delivering flyers whatever business they were promoting.
"The guy is giving a donation and if he's expecting something back then it's not a donation. He should be paying minimum wage."
Alcohol Healthwatch director Rebecca Williams was shocked to learn about the flyer plan, saying it was "completely inappropriate" to use young people to promote alcohol outlets.
"There are so many communities out there saying 'we don't want any more liquor outlets, we don't want them selling to young people, we don't want this alcohol abuse by young people' and yet a school's willing to not even consider the implications of their actions," she said.
She was relieved the school had rethought its decision.
Ms Carberry said schools were facing tough times and relied on fundraising to make ends meet.
"We value the opinions of our school community and based on this we have decided not to go ahead with the fundraiser.
"We did consider this carefully and the decision was made with the best intentions in terms of allowing the students to raise money for new sports jackets," she said.
Mr Ellis said he was trying to help the school by giving students fresh air and exercise as well as money.
However he acknowledged that paying money for a service was not a donation.
He said the flyer had no branding for his pub or the new restaurant and bar. It asked people to visit a website and enter details of the kind of food they wanted in a family restaurant.
He was disappointed the school had backtracked because he thought he was doing them a favour.
"I'll be on my bike doing it myself I guess," he said.
