The chairman of education watchdog Ofsted should keep his job despite provoking outrage by describing the Isle of Wight as a ghetto suffering from “inbreeding”, the chief inspector of schools has said.

Sir Michael Wilshaw said that David Hoare had gone “over the top” but had apologised and should be allowed to remain. He added that Hoare had been right to draw public attention to underachievement in rural and coastal areas like the Isle of Wight, where until recently school standards had been “terribly, pitifully low”.

Wilshaw also said the Ofsted chairman was wrong to rule out teachers from taking the chief inspector’s role in future. But he defended the choice of non-teacher Amanda Spielman as his successor, in spite of her nomination being opposed by the House of Commons education committee, which said she lacked the vision and passion needed for the job.

Former City banker Hoare was widely criticised after being caught on tape at a teaching conference making disparaging remarks about the Isle of Wight. “Most people go there for sailing for two weeks a year. There’s a sailing club that is one of the best in the world, where there’s champagne,” said Hoare in the recording, obtained by the Times Education Supplement.

“But just within inches, there are people who live in a ghetto ... They think of it as holiday land. But it is shocking. It’s a ghetto; there has been inbreeding.”

Isle of Wight council leader Jonathan Bacon denounced the comments as “truly offensive”, while Conservative councillor Chris Whitehouse said they were “absolutely inaccurate, inflammatory, unhelpful, unacceptable and frankly despicable”. Green party education spokeswoman Vix Lowthion said the Ofsted chair should resign.

But Wilshaw said that it was for Hoare himself to decide whether to stay on, telling BBC Radio 4’s Today programme: “That’s a decision for the chair, for David Hoare, to make.”

The chief inspector added: “My view is that he should stay in his job. He has apologised, he’s been big enough to understand that he went over the top, that he didn’t use appropriate language and he has apologised profusely.

“He’s been a good chair. He’s run the board well. And he’s been a good support to Ofsted. He is passionate about school improvement. My view is that he should remain.”

Although Hoare’s words had been inappropriate, he was raising an important issue, said Wilshaw. “He has drawn everyone’s attention to the problems of areas like the Isle of Wight and coastal resorts,” he said.

“It’s something that I’ve been talking about in my time as Ofsted’s chief inspector. We undertook a focused inspection of the Isle of Wight four years ago and found standards to be terribly, pitifully low.

“Children were being failed in many of the schools in the Isle of Wight. As a result of that, schools are now improving because Hampshire local authority – a very good local authority – has taken over the school improvement service and are doing good things in the Isle of Wight.

“He’s not accurate in the language that he used in terms of inbreeding, but he is right to draw people’s attention – as I’ve drawn people’s attention – to the problems in isolated communities, in rural areas and in coastal resorts.

“Under-achievement is now not generally taking place in the inner cities and the big towns, it is taking place in these sorts of areas.”

Wilshaw called for action to recruit effective staff to rural and coastal schools: “The reason why London and other big cities are doing well is because they’ve got good heads and they’ve got good teachers and people are attracted to those areas.

“It’s much more difficult to attract staff to areas which are less popular and where the challenges are that much greater. This is a big national issue. If we’re going to create a really good national system, where standards are good throughout our country, we’ve got to identify these areas and put good teachers and good headteachers into those areas.”

Wilshaw said that teaching experience was not a prerequisite for his job, but disagreed with Hoare’s suggestion that the post should not go to a teacher.

“You can’t rule out that,” he said. “He was wrong in ruling out that, but he obviously made a judgment on that one and has said so.”

However, he said he believed Spielman, a founder of the Ark academy chain and chair of the exams watchdog Ofqual, would do a good job as chief inspector. “I know Amanda because before I went to Ofsted I was director of education at Ark, which is one of the most successful academy chains in the country,” he said.

“Amanda was a key person in setting that organisation up. She knows about schools, she knows what makes for a good school, although she’s not been a teacher or a headteacher herself. I’m sure she’ll do a good job.”