The French company confirmed this afternoon at Misano that it had given Repsol Honda permission to run Bridgestone tyres on Pedrosa's bike for the rest of the 2008 season. Michelin will continue to supply Pedrosa's teammate Nicky Hayden.
Pedrosa had previously requested to switch to Bridgestones in late 2007 but Honda were unable to make the change at that stage.
Biabaud revealed that Michelin's relationship with Pedrosa had steadily declined, with the Spaniard increasingly critical of the company's tyres.
"The thing which was important was the fact that when a rider, especially in MotoGP, is demotivated first of all it is difficult to work with him," said Biabaud.
"The question of 'feeling' is an interesting question, but also it's a safety issue - he has to feel that he really wants to race."
He said Pedrosa's dissatisfaction with Michelin had begun to have a detrimental effect on Honda.
"The only thing we were looking at in this issue was to make sure that we would come to a solution in order to help Honda, because Honda had wanted some help on this issue because they didn't know how to solve it," Biabaud explained.
"Honda came to us because they had a problem with a rider. We had already been feeling this problem with the rider for a long time, even though he was leading the championship.
"At a certain point in time you need to say 'okay, we need to concentrate on the future'. Now we can concentrate on things which we think are more important, but the important thing for us was the management of the situation with Honda, because they were in a tough situation with their rider."
Biabaud insisted that the decision to part with Pedrosa had been taken jointly with Honda, and that MotoGP commercial rights-holder Dorna had not been involved, amid rumours that Dorna has been pushing for control tyres because it was concerned that Michelin's problems were taking star names like Pedrosa out of title contention.
"We met with Honda for probably 10 to 12 hours during the weekend and we agreed," Biabaud said. "It was something which we had to sort out between Honda and us, and then Honda and its sponsor (Repsol), which is very close to Dani. It is never the best solution, but it's the solution that had to be acceptable.
"We informed Dorna about the situation because we thought it was absolutely normal (to do so) but there was no pressure from Dorna, at least on our side. Nobody else forced us to do what we just did."
He remains confident that Michelin can bounce back with its remaining riders in the final part of the season. Yamaha's Jorge Lorenzo, Pedrosa's teammate Hayden, the Tech 3 Yamahas, and the LCR and JiR Honda teams will continue to run Michelins.
"It's a loss because we have lost a good rider, but in the meantime for the remainder of the season we will transfer the resources that we have to the other partners to make sure that we have a good end of season," said Biabaud.
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