A row has broken out within the government body that hands out more than £450 million each year to medical research over its new chairman’s fitness for the job.

Sir John Chisholm, who became chairman of the Medical Research Council last year, has run into stiff opposition from scientists who fear that a US-style business-orientated agenda is taking clinical research in the wrong direction.

Sir John, a former chief executive of the defence company QinetiQ, was appointed by the Government last year as it seeks to reshape medical research.

Ministers have placed a new emphasis on turning discoveries into therapies that can create wealth from health. While British science has always been good at winning Nobel prizes, it has been less successful at commercialising discoveries, such as those that underpin many modern cancer drugs.

Sir John, an engineer by training, was instrumental in expanding QinetiQ into new civilian markets for medical devices, electronics and transport. He was widely seen as ideal for the job, sensitive to the demands of both science and commerce.

A committee of MPs, however, has now questioned his position just ten months into the role. He has also upset MRC scientists with what they perceive as too narrow a focus on business opportunities at the expense of basic research.

They say that he takes too active a role in decision-making for a supposed nonexecutive chairman. The Times understands that at least two well-qualified candidates to succeed Professor Colin Blakemore as MRC chief executive decided not to apply because of concerns about interference.

Last month, the Commons Science and Technology Committee expressed “serious reservations as to whether Sir John is the right person to guide the MRC executive through the coming period of change”.

Ministers have remained staunchly supportive. Ian Pearson, the Science and Innovation Minister, said: “Sir John has a first-class background in business, and has all the qualities needed to lead the MRC through the challenges of the future. He has my full backing.”

His supporters say that he has suffered because of personality clashes and suspicion of his business background. They also point to the scientists’ nervousness about change, and a natural worry that a new approach to funding will leave their projects and institutions out in the cold.

The chairman’s difficulties reflect a growing unease at the direction of government policy, based on a root-and-branch review of medical research conducted last year by the venture capitalist Sir David Cooksey at the behest of Gordon Brown.

The report said that there had been too little emphasis on turning achievements into new therapies and making these commercially successful. One such example was the invention of monoclonal antibodies in the 1970s, for which an MRC team won the Nobel prize.

These artificial versions of immune proteins are the foundation of block-buster cancer drugs such as Herceptin and Avastin. The MRC, however, has made only a fraction of the billions this has generated for the pharmaceutical industry.

The Cooksey report said that the MRC should continue backing fundamental science, but that new government funding should go mainly to so-called translational research aimed at developing treatments and creating wealth.

Even Sir John’s fiercest critics accept the Cooksey agenda, and the case for more translational research. Many scientists, however, are worried that the Government is implementing it too narrowly, and has appointed Sir John to see this through. They fear that the funding of research into basic biology that does not yet have a purpose will suffer, and that there will thus be less fundamental science to translate into medicine.

An example is the sequencing of the genetic code of the nematode worm, which led ultimately to the mapping of the human genome.

Sir John rejected the charge that he does not regard such work as important. “I don’t think I have got a different attitude at all,” he told The Times. “I am not making the point that everything should be oriented towards applied science.

“What I am making is the point that one of the big advantages of bio-medical science is that it is related to an obvious national interest. But basic research is critical to that, it’s very fully in the MRC’s sights.”

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