The Malaysian prime minister, Najib Razak, has insisted there was no wrongdoing in the 1MDB scandal and instead blamed a “problematic business model” for the billions of dollars that went missing from a government investment fund.

Najib, who is seeking re-election in the Malaysian elections on 9 May, used a rare international interview to downplay the scandal and emphasise his own innocence – but conceded that “mistakes were made”.

1MDB became one of the biggest corruption cases in the world when it emerged in 2015 that at least $3.5bn had been stolen from the Najib-run fund. A US Department of Justice lawsuit alleged that the money fuelled a global spending spree by some of the prime minister’s associates, on property, jewellery, a Picasso, a Van Gogh, a yacht and the production of two Hollywood films.

Almost $700m was alleged to have been siphoned off into Najib’s personal bank accounts, a charge he denies.

The scandal has been one of the biggest issues in the current election, with the opposition – led by the the 92-year-old former prime minister Mahathir Mohamad – regularly using it to discredit Najib and accuse his coalition government of corruption.

Speaking to Bloomberg about 1MDB, Najib said that in hindsight “I would have probably not had that kind of business model, probably I would have made sure [there was] tighter supervision”.

However, he dismissed Mahathir’s allegations that he was implicated in the missing money. “You cannot just accuse somebody of being a thief or anything unless there is evidence,’’ he said. “It’s been cleared, there’s been no wrongdoing. I stand by it.”

Najib did concede that the scandal had caused “some reputational damage” to his own government and Malaysia, but said he was in no doubt that the ruling coalition, led by his party, UMNO, would win the election.

He even predicted they would gain more seats than in 2013 due to the fragmentation in the opposition Pakatan Harapan coalition.

“We are reasonably confident of a good result,” said Najib. “There is no movement for changing the government, I don’t see that. That’s not saying we will win with a huge majority, no I am not going to predict that, but I am going to say that we are reasonably sanguine about the result.”

Mahathir, who was Malaysia’s longest-serving prime minister between 1981 and 2003, still commands huge voter loyalty and is seen as the man behind Malaysia’s economic boom years.

In the past few weeks, Najib has been accused of using “dirty tricks” – passing legislation that changed the electoral boundaries to swing the system radically in favour of the ruling coalition, and a law that targets so-called fake news, which many have argued can be used to silence Najib’s critics .

The election commission, which is controlled by Najib, also temporarily dissolved Mahathir’s political party in an attempt to stop him from being able to run and even recently ruled that Mahathir’s face is not allowed on national campaign posters.

The election battle between Najib and Mahathir is particularly personal, as Najib was Mahathir’s former protege. “He wanted me to do his bidding,” Najib said of the fallout between the two. “I think he’s obsessed about control, about calling the shots.”