Andrew Mitchell has denied acting as a "rogue minister" by sanctioning a £16m aid cheque to Rwanda on his last day as international development secretary.
He told MPs it was a collective decision taken with the prime minister.
The move was controversial as Rwanda's rulers have allegedly funded rebels killing and raping in neighbouring Democratic Republic of Congo.
David Cameron has said Rwanda is a "success story" but its leaders should not support militias in Congo.
Mr Mitchell was being questioned by the cross-party international development committee about UK aid to Rwanda while he was international development secretary between May 2010 and September 2012.
He denied Britain had gone "out on a limb" by continuing to fund development in Rwanda, when other European donors had suspended their aid.
He also denied having a "personal interest" in maintaining good relations with the country's leader Paul Kagame, after visiting it several times to take part in Project Umubano, which saw Tory MPs - including several members of the committee quizzing Mr Mitchell, who declared an interest - help with local business and education projects.
The project, visited by Mr Cameron in 2007, was a key part of the Tory leader's effort to present a more compassionate image.
But Mr Mitchell said he had stopped taking part in Project Umabano in May 2010 when he became international development secretary - and the coalition had simply continued with the "candid but warm relationship with Rwanda" established by Labour Prime Minster Tony Blair.
The £16m, which amounted to half of Britain's annual aid Rwanda, was suspended in July over concerns about the country's alleged behaviour in DR Congo, said Mr Mitchell.
But the money started flowing again in August after conditions set by Mr Cameron were "partially met".
The only one that had not been met was the explicit condemnation by the Rwandan government of militia violence in DR Congo, he told the committee.
It was decided to channel half of the money directly to education and agriculture projects in Rwanda, rather than giving it to the Kagame government to spend.
The decision to give the money was "entirely proper" and in line with guidance from senior officials, the foreign secretary and prime minister and after visiting the country to see the situation on the ground for himself, he said.
"The press have suggested that a rogue minister can sign cheques under the bed clothes and bung them out to dubious leaders. That is completely untrue.
"It is very insulting. I take deep offence at the suggestion that I would ever behave in that way," Mr Mitchell told the committee.
He said Germany and the Netherlands had suspended direct support to the Kagame government but the EU had continued its aid programme unchanged, and while the US cut $200,000 (£125,000) from military support it had pressed ahead with a $160m development aid programme.
He said the British government had not come under pressure from other countries to suspend aid - and insisted the Rwandan government could be trusted with the money.
"Rwanda does exactly what they say they are going to do with our taxpayers' money," he told the committee.
"Taking away budget support would have no effect on the elite in [Rwanda's capital] Kigali, but it would, bluntly, take girls out of school elsewhere in that country.
"So it might make us feel better to remove budget support but it would not affect the people who make the decisions."
He left the international development department in September to become Conservative chief whip, only to resign weeks later following a row outside No 10 in which he swore at a police officer.
In July, Mr Mitchell blocked the UK's £27m annual contribution to the Rwandan government after he visited the Kivus region of the neighbouring Democratic Republic of Congo.
However, in his last day at the department, he decided to unfreeze the aid, citing progress at international talks. This meant a £16m tranche of the total funding was paid.
Mr Mitchell's successor in the role, Justine Greening, will decide in December whether to free up the remaining amount, after the final report of the UN Security Council's Group of Experts on Rwanda is delivered at the end of November.
A leaked report by the expert group, seen by Reuters news agency, suggests Rwanda's defence minister was relaying military orders to leaders of the M23 rebel group in the east of the DR Congo.
Rwandan President Paul Kagame has been praised for improving the economic and social conditions in the east African country, in which an estimated 800,000 people were killed in ethnic violence during 1994.
But Mr Kagame, in power since 2000, has come under fierce criticism recently for allegedly funding the M23 rebels.
The rebellion started in April, when a militia that had been absorbed into the Congolese army mutinied and went on the rampage. Since then nearly half a million people have been displaced by fighting between the M23 and the army.