Chancellor George Osbourne insists the criticism of Britain's Queen Elizabeth's advisors is "unfair".
The politician spoke out following a report which claimed the Royal Household is failing to correctly control the monarch's finances and allowing royal buildings to "crumble".
He went on to criticise Margaret Hodge, the chairperson of the public accounts committee, after she suggested the queen should supplement her income by renting out Buckingham Palace for commercial events.
He said: "I have to say I think the Public Accounts Committee chair [Mrs Hodge] is being unfair to the way the Royal Household has managed its finances.
"They've lived within a frozen budget over the last years and indeed the cost to the royal family for the taxpayer has come down quite sharply over the last couple of decades.
"I think they run the Royal Household well. Not only are they a very important part of our constitution, but they are a huge attraction for tourists all around the world.
"The royal family generate a huge revenue for this country by the tourism they bring in and the prestige they generate all around the world."
The committee's report found the royal household has overspent so much the queen's reserve fund has fallen from £35 million to £1 million, and said efficiency savings of just five per cent have been made in the past five years.
This was compared with government departments which are cutting their budgets by up to a third.
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