Pat McQuaid acknowledges that the International Cycling Union made a mistake in accepting a donation from Lance Armstrong in 2002, but insists it was done with the best intentions.
Armstrong, who earlier this year admitted taking performance-enhancing drugs after being banned for life from cycling and stripped of his seven Tour de France titles in 2012, gave $125,000 to the UCI.
The UCI has strongly denied the donation was connected to any cover-up of a positive test but McQuaid, who replaced Hein Verbruggen as president of cycling's world governing body in 2005, now concedes it was an error to accept the money.
He told BBC Radio Five: "On reflection, it would have been better had we not taken that money.
"Having said that, when we took it, we announced publicly, with a press statement, that the money was being given and what the money was being used for.
"It was done with the best interests - not in any underhand way," added the Dubliner, who is facing a re-election challenge as UCI chief from British cycling president Brian Cookson.