He was accused by party members of supporting a splinter group of dissidents from Prime Minister Meles Zenawi's Tigray People's Liberation Front, who were expelled from the party in March.
Ethiopia's president has accused the government of embarking on a campaign of propaganda against him.
Dr Gidada was sacked from the Oromo People's Democratic Organisation (OPDO - a member of the ruling coalition) last week after being accused of supporting dissidents opposed to Prime Minister Meles Zenawi.
Dr Gidada said the full facts leading up to his dismissal from the central committee of his party were not transmitted to the public.
"The on-going campaign to corrupt my name is destructive," Dr Gidada wrote, "not only to me as someone chosen by the people to serve as president, but also destructive to the constitution, to the government, to the OPDO and to the democracy that we are trying to build."
'Supporting' dissidents
The president was dismissed from OPDO following his walkout of a key government meeting last Friday.
He was accused by party members of supporting a splinter group of dissidents from Prime Minister Meles Zenawi's Tigray People's Liberation Front, who were expelled from the party in March.
The president admitted he felt the dissident affair was not handled in a democratic manner by the government, but denied that he was a supporter of the dissidents.
Dr Gidada said he had tried to mediate between the government and the splinter group.
"Just because I attempted to mediate, I was labelled as one of the dissidents. Just because I had pointed out the various undemocratic actions related to their case, it should not mean that I am their supporter," Dr Gidada wrote.
Dr Gidada said that he had been forced to write this open letter as the OPDO had failed to make public a previous letter he had written to them.
He warned that if the propaganda did not stop, he would step down from the presidency before the end of his term, which is in September.
However if the propaganda, lies and other things against me continue, then I may be forced to change my mind."
The president is not prone to making controversial statements. He is also considered by most to have no power to speak out unless permitted to do so by the prime minister.
Political analysts say this recent action is likely to gain Dr Gidada considerable support among ordinary Ethiopians, who already feel that the president was unfairly treated.
Analysts say the dismissal of the president is just an attempt by the prime minister to strengthen his position as he faces rising opposition not only from within his party, but also from within the army and the general public.