The director of the National Gallery of Australia, who is set to retire at the end of this month after 10 years at the helm, said the institution would never have purchased a work knowing it may have been stolen.

But in the wake of revelations involving a now-infamous Indian artefact, Dr Radford said the attention paid to the acquisition had been difficult to address, given the legal implications surrounding the purchase.

The 900-year-old bronze statue known as the Dancing Shiva was allegedly stolen from a temple in India.

In 2008, the gallery paid $5 million for the statue from a now-disgraced New York art dealer, Subhash Kapoor, who had been working with some of the world's largest museums for 30 years.

Dr Radford maintained that collecting institutions around the world were facing similar issues relating to looted artefacts, and that the gallery had done everything it could to verify the Shiva's provenance.

"Works are being given back all round the world, Khmer works are being given back almost monthly with no media attention, and other institutions are going to be giving Indian works back, but it's Australia that's taken up this issue as if it's new," he said.

"It's been going on for a long time. I regret and am sad that it happened. No museum deliberately buys something with wrong papers that may have been falsified, but meanwhile, while this controversy's been going on, I've had to run the gallery."

Speaking to Fairfax Media in one of his final interviews as director, Dr Radford said he was glad the Shiva had been returned to India – an example of the "soft diplomacy" that often came into play when dealing with international collections.

"I'm glad we were able to help Australia in our relationship with India by returning it at a good time," he said.

"It's not the first time that soft diplomacy has been able to be used, with our Indonesian shows that we've just had … It shows how we can be used by foreign affairs and so on."

He said the sustained media campaign against the gallery in the wake of the revelations had been hard to take, particularly when the gallery had a packed exhibition schedule.

"I've been doing this for 43 years and in that regard [media scrutiny] has been getting worse and worse. And also, the idea, and I don't want to go about this, that high-profile people attempt to take down high-profile people all the time."

Dr Radford also reiterated the statement put out by the gallery over the weekend, in which he said the gallery's reputation had been damaged by accusations that it had not followed due diligence in acquiring the Shiva.

"Some have been quick to judge, suggesting the gallery rushed into the purchase relying only on Kapoor's reputation and reassurances. They have ignored or glossed over the lengthy, comprehensive and independent research that the gallery undertook before acquisition. Despite these efforts, court proceedings may yet confirm that the gallery has been a victim of a most audacious fraud," Dr Radford said in the statement.

"In retrospect, had the theft been discovered and reported earlier, before the gallery purchased the work in 2008, the history of this situation would be very different," the statement said.