O'Neill spoke at a three course meal and drinks at Villa Park for fans who bought tickets for their UEFA Cup game at CSKA Moscow.
Many of Villa's 300 travelling support complained bitterly as O'Neill's virtually reserve team crashed out 2-0.
Addressing the fans, the Mirror says O'Neill insisted: "You went to Moscow thinking we had a chance in a game. You have spent hard earned money going so I'll give you the explanation and then don't ask me to explain anything again.
"We played against Moscow at home and we went as strongly as we possibly could.
"We were hoping to try to get through in the tie and we were sitting fourth in the league.
"Then we played Chelsea and I thought we looked a wee bit leggy. The players won't be coming to tell me but I have to make these assessments.
"I made a decision at that stage as we were going to Moscow and playing on a plastic pitch.
"If we had another nine players in our squad then we could have gone for it."
O'Neill also insisted that last night's dinner was a club function and denied paying for it.