The Medical Research Council's (MRC) chairman has spoken out for the first time against MPs who said he was unfit for his job.

In an exclusive interview with Guardian Research, the millionaire businessman Sir John Chisholm said he felt MPs on the commons science and technology committee "have their knickers in a twist". Sir John, who took up the reins of the MRC in October 2006, added the MPs would not push him into resigning.

In a damning report published last week, the MPs said they have "serious reservations" that Sir John is the right person to guide the MRC through its restructuring and the departure of its current chief executive, Colin Blakemore, later this year. Phil Willis, the committee's chairman, said, "The MRC is entering an exciting period of change and requires exemplary leadership. Based on our inquiry, we are not convinced that Sir John Chisholm is the right man for the job."

Hitting back, Sir John says: "I have tremendous respect for the science and technology committee but I don't understand the basis of how they got to where they did on this one."

Sir John intends to stay put at the MRC, which allocates around £500m a year in public funding for medical research. "I am appointed by ministers and the minute the ministers don't want me to do the job I will be gone," he says.

Sir John's background in business was a cause for concern for some members of the MRC's council and basic scientists who feared he would favour translational research over basic science. Sir John is most notably credited with turning a collection of government-owned defence research laboratories into QinetiQ, a defence and security technology company, in 2001. Sir John became chairman of QinetiQ in 2005, and a year later the company floated on the London Stock Exchange making him millions.

Mr Willis criticised Sir John for being "vague" about the process of his appointment and said he was "evasive" when discussing how the consultants Ernst & Young were appointed to undertake an internal review of the MRC.

Sir John says he cannot respond to the MPs' criticisms on the process by which he was appointed. "I did not appoint myself so what can I say about that. I have no comment." But there is a "basic misunderstanding" around the appointment of Ernst & Young, he says.

According to Sir John, the MRC took a collective decision to seek external advice on how it should move forward after a report for the Treasury recommended top-to-bottom reforms of the council. Sir Keith O'Nions, director general of science and innovation at the Department for Innovation, Universities and Skills, recommended approaching Ernst & Young.

"My only contribution was seeking advice from Keith O'Nions as to who in his experience has developed the kind of knowledge and experience to get up to speed fast. I had no knowledge of Ernst & Young before that."

"I am sorry that perhaps I did not explain the process well enough at the time. Obviously, if I had explained it well enough they would not have come to the conclusions they did," says Sir John, whose position at the MRC is part-time and unpaid.

"I prioritise the amount of time I have at the MRC towards issues like ensuring the MRC has enough money to continue doing excellent research. I did not spend time rehearsing answers for the committee."

The MPs also expressed concern that Sir John did not produce evidence showing that the 17-strong MRC council, which he plans to slim down to 12 members, had been inefficient at decision-making.

Sir John counters: "Every university in the land except for two notable exceptions has gone away from giant councils exactly to enable that kind of more profitable and focused discussion. I doubt I am out of step with the weight of opinion on governing bodies being smaller and more focused."

He also seeks to reassure scientists that the MRC's new focus on translational research - turning discoveries into benefit for patients - would not mean a reduction in basic science - where discoveries are made.

The MRC is expecting an increase in its budget from the comprehensive spending review later this year, which it has said will go towards translational research so that more of its discoveries can be turned into useful products and services. The budget for basic science will remain stable, but researchers say this will not be enough to keep the UK ahead of the game and could mean fewer medical discoveries.

Defending the MRC's refocused priorities, Sir John says: "The MRC's catchphrase is 'discovery science for health'. Without discovery you won't have the raw material to improve health. But it makes no sense at all to discover something and not do anything with it."

But he adds: "What we have here at the MRC is a promise that we will have more money in real terms to ensure that the product of our discoveries will create benefits and I am confident that those wider benefits will create enthusiasm for further basic research. I can give an absolute assurance that basic science is safe at the MRC."

· Natasha Gilbert is news editor of Guardian Research