Sir Philip Green has instructed lawyers to demand an immediate apology from Frank Field, one of the senior MPs who led an inquiry into the failure of BHS.

The billionaire retail tycoon launched a fightback on Monday, hours after he was heavily criticised in a report by two House of Commons committees, one of which is chaired by Field.

The report by MPs triggered calls for Green to be stripped of his knighthood. It found the former owner of the chain had “systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both”.

All BHS stores will close by the end of August after the department store group went into administration in April leaving a £571m pension deficit. Green had sold BHS for £1 just over a year earlier to a consortium led by Dominic Chappell, a serial bankrupt.

After the report was published Field went on to make several even more critical comments on BBC Radio 4’s Today programme, without the protection of parliamentary privilege afforded by the report.

Field alleged Green was the principal character in the collapse of BHS and “worse than Robert Maxwell”, saying he was somebody “who behaves like Napoleon”, plundered BHS, and must now pay out to fund the pensions hole left behind.

Lawyers for Green from City law firm Schillings are challenging the MP’s statements, claiming they are defamatory and false and warning that they must not be repeated. The letter to Field, sent to the Guardian by advisers to Green, reads: “In that interview you alleged that our client had stolen money, specifically from the BHS and Arcadia pension funds. This statement is highly defamatory and completely false.

“Our client has never stolen any money from BHS, Arcadia or the pension funds and you know that. In particular, there is nothing in the recent Report of the Work and Pensions and Business, Innovation and Skills Committees, (the Report) (of which you were one of the Chairs) to support your allegation.

“Clearly an allegation that our client is a thief is likely to cause him serious harm. Further, in relation to the recent Parliamentary hearings and the Report and allegations made there you were protected by privilege. That does not apply to the interview this morning (or any others you intend to make).”

The letter goes on to demand “an immediate and fulsome apology in relation to the allegation” and a reply within 24 hours. “The other remedies to which our client is clearly entitled will very much depend on form and manner of your response and in the meantime, all of our client’s rights are reserved,” it adds.

Field himself revealed the existence of the legal letter, telling the BBC that he thought Green’s conduct was “displacement therapy”. “Instead of writing a big cheque he is firing off lawyers’ letters. He needs to stop messing around and write a big cheque,” the Labour MP said.

A separate statement from Green on the contents of the work and pensions committee report says it is the “predetermined and inaccurate output of a biased and unfair process”. “With the benefit of hindsight, clearly Retail Acquisitions and Mr Chappell were a very bad choice as purchaser on many fronts and I feel badly let down,” he said. “Sadly, one cannot turn the clock back. The disposal of BHS was made 100% in good faith and I still believe that we provided Retail Acquisitions and Mr Chappell with the appropriate finance ... I am trying to find a solution for the BHS pension and am continuing to work with the regulator to achieve an outcome ... I do not believe that this story is being in any way fairly portrayed.”

It also emerged on Monday that Green is threatening legal action against Chappell and the other members of his consortium, Retail Acquisitions.

Green alleges that Retail Acquisitions misused BHS funds and that Chappell falsely represented his business credentials. The legal letter, sent by Green’s solicitors at Linklaters, warns Chappell and his associates that they could be sued. Green declined to comment, while Chappell did not respond to requests for comment.