The ministers rejected claims the company had been sold on the cheap at a cost of more than £1 billion to taxpayers because the price of shares soared after going on offer.
Business Select Committee chairman Adrian Bailey said it was an "astonishing assertion" to claim the shares were sold for the best price, and Tory MP Brian Binley said the ministers had been let down by experts who advised on the sale.
Mr Cable claimed the threat of strike action by Royal Mail staff had contributed to the decision to price the shares at 330p for the initial public offering. He said two weeks of strike action would have "wiped out" the company's profits.
Labour committee member Willie Bain said: "I think the public will be flabbergasted that ministers are happy with the advice that has been tendered given they have foregone hundreds of millions of pounds as a result of this flawed transaction."
Mr Fallon said: "Two years ago we had a loss-making Royal Mail. Today we have one of Britain's top 100 companies. That's a success."
Mr Cable acknowledged there were lessons to be learned about the way privatisations were handled, but said: "Hindsight is a wonderful thing, but on the basis of the facts we had, this was a successful transaction. We don't apologise for it and don't regret it."
After a similar comment by Mr Fallon, Mr Bailey told the ministers: "That's absolutely Alice In Wonderland. The fact is you didn't get the best price because on the day of sale the share prices soared. That's an astonishing assertion."
CWU general secretary Billy Hayes said later: "It's clear Cable needs to go - this is a man who lost the taxpayer a billion pounds. A postal worker who lost a valuable item would be sacked and the same standard needs to apply to Mr Cable."
Royal Mail shares closed last night at 521p.