The report cited a lack of foresight within the UK's Department of Trade and Industry (DTI) and the wider scientific community as the reason for the decline, after early investment in nanotechnology research had placed the country in a leadership position, reports Cordis News.
Nanotechnology has a number of potential applications in the pharmaceutical and medical sciences, including using nanoparticles that can deliver drugs to specific regions of the body, new materials for medical devices and as a way to target radiation therapy accurately to tumours.
In a letter to the Financial Times, Lord Sainsbury accuses the select committee's report of underestimating the 'substantial investments government has been making in nanotechnology'.
"The £90 million (€137m) I announced for micro and nanotechnology last July is just the latest in a series of investments in this important emerging technology; for example the Research Councils are currently investing about £70 million a year into nanotechnology research," he maintains.
However, Lord Sainsbury admitted that many companies are still unaware of the potential of nanotechnology, and to address this announced the creation of a national network to raise awareness and facilitate access to micro and nanotechnology facilities in the UK.
"We have already received more then 30 bids from existing UK centres to provide a service to industry in the development of new micro and nanotechnology products and services, and will be making an announcement about the first centre soon," he said.
Meanwhile, concerns about the safety of the tiny particles used in nanotechnology were raised last week by a US researcher, who has found that the particles accumulate in the nasal cavities, lungs and brains of rats, raising concerns that this build-up could lead to harmful inflammation and a risk of brain damage or other central nervous system disorders.