Cable criticises Prince's outburst – but he can keep royal trade role

The Business Secretary, Vince Cable, yesterday chided Prince Andrew for straying into anti-corruption policy in unguarded remarks at a meeting with British businessmen – but insisted that the royal trade emissary should continue in his globetrotting role.

As questions arose over the Duke of York's suitability for his unpaid post as the UK's special representative for international trade after the leaking of a diplomatic dispatch describing his "astonishingly candid" views, Mr Cable said it would be "helpful" if Prince Andrew avoided matters such as anti-bribery laws.

An unlikely coalition of critics – from republican campaigners to the former Conservative Foreign Secretary, Sir Malcolm Rifkind – condemned Prince Andrew's outspoken observations during a private brunch in Kyrgyzstan two years ago, when he described investigators from the Serious Fraud Office (SFO) as "idiotic" and suggested that the French indulged in corruption. Sir Malcolm described the comments as "very unwise".

Buckingham Palace and Downing Street refused to comment officially on the leaked American diplomatic memo, leaving it to the senior Liberal Democrat Cabinet minister to come to the defence of the fourth-in-line to the throne, who was yesterday keeping a low profile as he flew out of London to New York on private business.

A memo by the US ambassador to Kyrgyzstan obtained by Wikileaks described how Prince Andrew had behaved "cockily" during a two-hour discussion which had "verged on the rude".

Mr Cable said: "He works extremely hard, going around the world promoting British exports and does a very good job doing it. I don't want to be negative about him because he's a great guy and he's very enthusiastic about what he does. He does a lot of very good work for Britain in trade promotion."

The Business Secretary nonetheless criticised Prince Andrew for appearing to question the SFO investigation into alleged bribes paid to a Saudi royal in return for the multi-year "Al-Yamamah" arms deal with BAE Systems. Tony Blair closed the investigation in 2006 on national security grounds.

Mr Cable said: "I would just make it absolutely clear that we regard bribery overseas as illegal and unacceptable. That is not a matter for Prince Andrew; that's a matter for the Government."

Campaigners said Prince Andrew had undermined the credibility of British institutions. Graham Smith, of constitutional reform group Republic, said: "He has shown a complete lack of judgment and, frankly, a level of stupidity. He is clearly not fit for the job."

The dispute came as the leaked cables provided further insight into some of Prince Andrew's more colourful contacts from his eight years of travelling the world as a trade emissary. A despatch entitled Kazakhstan: Money and Power written in January provides an unvarnished description of Timur Kulibayev, the billionaire son-in-law of the oil-rich country's President and the businessman who paid £15m in 2007 for Prince Andrew's 12-bedroom mansion at Sunninghill Park in Surrey.

That was £3m over the asking price and paid after the house had been on the market for five years. Richard Hoagland, the US ambassador to Kazakhstan, wrote: "Timur Kulibayev is currently the favoured presidential son-in-law, on the Forbes 500 list of billionaires (as is his wife separately), and the ultimate controller of 90 per cent of the economy of Kazakhstan."