Managing Director Jonathan Neale said the change of regulations at Silverstone had hit the Woking squad harder than either Red Bull or Ferrari, but promised his team would once again be in contention at the Nurburgring.
"When you look at Silverstone, the impact of the engine regulations and rules cost us more than both Ferrari and Red Bull - and that is a matter of fact, not opinion," Neale declared during a Vodafone phone-in on Wednesday.
"We probably went backwards relative to them by about 0.7 seconds, that's why we found ourselves dropping back. Up until then, we were the only ones putting up a creditable fight against Red Bull, having both drivers winning races.
"We're not by any means being complacent about the progress that Ferrari has made, or the development of Red Bull, but our job is to beat both of them and that's what we're going to do."
Neale insisted McLaren could overhaul its current points deficit to Red Bull Hamilton sits 95 points behind Vettel in the drivers' standings, while McLaren lies 110 points adrift in the constructors' but admitted the team would have to be aggressive and take risks to do so.
"F1 isn't something you can play safe in, it's about taking risks and getting the balance right," he said. "Clearly when you are coming from behind, as we and Ferrari are, then you have to work very hard at that.
"In terms of car development, it means that we have to push very hard to close the gap. It is about taking risks.
"Obviously in the latter part (of Silverstone) Fernando was able to show what he was able to do and the underlying pace of the Red Bull showed itself again. We're mindful of that, not at all complacent, but we're not too petrified."
Neale also insisted that McLaren would continue to devote all its efforts into improving the current car and catching Red Bull, saying: "This organisation exists to win races, and while it is mathematically possible to win the championship, it's possible.
"Even if it isn't, that's not to say we won't try and win races its good for us, our drivers and it's what we're about. We're not going to make it easy for Red Bull, put it that way."