Ministers have defended their handling of the science budget after MPs said that poor management had put key facilities at risk.

The Commons innovation, universities, science and skills committee said that ministers were to blame for the mishandling of funding allocations.

It used a report on Wednesday to highlight problems at the newly created Science and Technology Facilities Council (STFC).

Despite funding increases from the 2007 comprehensive spending review, the committee said the government had not kept enough money aside to cover its spending commitments.

As a result, there was a shortfall of nearly £165m at the STFC, it claimed.

Committee chairman Phil Willis said: "The events of the past few months have exposed serious deficiencies within STFC's senior management, whose misjudgements could still significantly damage Britain's research reputation in this area both at home and abroad.

"Substantial and urgent changes are now needed in the way in which the Council is run in order to restore confidence and give it the leadership it desperately needs."

The committee raised concerns over world-famous science institutions, including Jodrell Bank observatory and Daresbury laboratory.

There were "serious questions" about the performance of STFC chief executive professor Keith Mason.

However, Professor Mason said he had "taken decisive actions" to address the issues in recent months.

Skills secretary John Denham said the government "have fought for, and won, record resources".

"We will continue to argue the case for fundamental and applied research," he said.

"As ministers, we will take only those strategic decisions which, in the modern world, have to be the responsibility of government.

"Beyond that, it is for the research community itself - research councils and researchers - to set priorities and to distribute funds."

A spokesman for the Department of Innovation, Universities and Skills pledged to respond fully to the report, but insisted the government was "committed to ensuring the UK remains a world leader in science and research".

"All UK research councils have received increases in funding, supporting the country's science base and also enabling research on some of the major global issues facing the nation," he said.