The mayor of Tower Hamlets, Lutfur Rahman, has hit back at claims he has behaved like a “medieval monarch” dispensing funds to favoured ethnic minority groups, saying the attacks are fuelled by a political class embarrassed by the success of his brand of community politics.

Rahman faced calls to resign on Tuesday after a PricewaterhouseCoopers report commissioned by the communities secretary, Eric Pickles, found the borough was not delivering best value for the taxpayer.

Pickles responded by saying he would send three commissioners to oversee the running of the council until spring 2017.

Writing on the Guardian’s Comment is Free, Rahman, who was removed as Labour candidate in 2010, said: “We have proven that in the heart of the London machine, national politics can be replaced by community politics, and some would have us pay dearly for that.”

He writes: “There are politics behind the audit and Pickles’ proposed intervention, and they are the politics of a political establishment furious that my administration continues to embarrass them. I was elected twice as mayor on considerable majorities against huge national political machines. A majority of voters in Tower Hamlets knew I would put them first no matter their background. I’ve delivered on that principle.”

Repeating his assertion that the report found no evidence of fraud or corruption he said: “Contrary to impression given, the overwhelmingly bulk of grants were allocated to those organisations that provide services for all communities, not just one community. If most grants went to the west of the borough, it is because the majority of voluntary organisations are based there. Nor was the Poplar town hall building intentionally sold off to an associate of mine. I was not aware of or personally responsible for the details of this sale. I did not get into politics to give out backhanders.”

He also insisted the absence of a council chief executive was not his responsibility, saying his efforts to make such an appointment had been blocked by his political opponents.

He added that he would “not take lectures on ‘the politics of division’ from parties that bash immigrants and those on welfare benefits, or from politicians disgraced by expenses scandals, discredited by lies told to justify war, and intent on scapegoating the vulnerable in our society for an economic crisis caused by the most powerful”.

Rahman has a fortnight to respond formally to the report sent to Pickles by the accountants in a bid to persuade Pickles there is no need for him to send in the commissioners. It is still possible the dispute will end up in the courts.