The UK government has rejected claims that the Medical Research Council (MRC) is guilty of financial bungling by misjudging its projected income and then having to turn down applications for research grants.

The Department of Trade and Industry (DTI) cleared the UK's leading medical research institution of mismanagement in its official response to a damning report from the House of Commons Science and Technology Committee. The response was delivered Wednesday, June 4, in the House of Commons and prompted an angry response from some MPs.

Although the DTI agreed the MRC needed to improve the way it makes financial judgements and "plan its forward expenditure in detail," it rejected allegations that this amounted to mismanagement.

In a detailed response to the committee's criticisms it stated, "We cannot agree with the committee's assertion that the MRC has mismanaged its funds. We are satisfied it has properly controlled its expenditure. Its accounts have been audited by the National Audit Office."

The DTI verdict provides a boost for the beleaguered MRC after a difficult few months during which it has faced stinging criticism from MPs and backlash from some of its own scientists over the proposed closure of the National Institute for Medical Research in north London.

In March 2003, the Science and Technology committee produced a report called The Work of the Medical Research Council, in which it attacked the council for poor planning and focusing on expensive, long-term projects that are politically driven and diverting money away from "top quality grant proposals."

One section of the report stated, "The MRC has mismanaged its fund in such a way as to create unwarranted fluctuations in its awards of new grants. It appears to have gambled on increases in income that were not, and were unlikely to be, forthcoming."

Much of its criticism was reserved for the ambitious Biobank project, a £45 million initiative to collect DNA samples from a half million volunteers. It alleged, "Our impression is that a scientific case for Biobank has been put together by the funders to support a politically driven project."

But the DTI insists the MRC was acting on "the best information available" when, in July 2000, it made crucial judgements on how much money would be forthcoming. And in a vote of confidence, the government said the MRC could rightly claim much credit for the high status of UK biomedical research. "The government's view is that, given the MRC's long-term vision and scientific strategy, there is every reason to expect a similar record in future."

MRC Chief Executive George Radda said in a statement that the DTI's endorsement was "especially pleasing… I, and my successor, Professor Colin Blakemore, will do all we can to live up to that," he said.

But MPs on the committee are refusing to let the matter lie and have promised to raise their concerns with Blakemore later in the year. Chairman and Labour MP Ian Gibson said ministers had ignored their main contentions and even accused the MRC of "deliberately misleading" MPs and the media over its financial problems.

"The weakness of the government's response shows just how bad things have got at the MRC. It needs a complete overhaul and its new chief executive must change its culture," said Gibson in a statement.