"It's been very destabilising but we've got to make sure going forward that the football club keeps going from strength to strength." Balls told reporters.
"He (McNally) was also responsible for bringing in Alex Neil who is one of the best young managers in English football."
Balls was a Labour Member of Parliament for 10 years from 2005, holding the senior positions of Shadow Home Secretary and Shadow Chancellor of the Exchequer before his defeat in elections last year.
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Second from bottom Norwich, who are four points from top-flight safety, host Watford on Wednesday knowing they need a victory to have any hope of avoiding the drop.
They are certain to be relegated though if fourth from bottom Sunderland beat Everton on Wednesday.
"We've got a job to do tomorrow night," said Neil, 34. "We need to keep believing and carry the fight.
"We're focused and still in with a chance so we need to give ourselves a shot."
Norwich finish their campaign with a trip to Everton on Sunday.
(Reporting by Nivedita Shankar in Bengaluru; Editing by Tony Jimenez)
