BANK of England directors felt powerless to stop the City gamblers responsible for landing British taxpayers with hundreds of billions of debts, documents released yesterday show.

Minutes taken from a scrutiny committee meeting of the court of directors shine an astonishing light on the chaotic events of 2007-9.

They show how the bank’s directors discussed the country’s “strong” regulatory regime hours before the dramatic collapse of Northern Rock sparked the worst financial crisis since the 1930s.

And five months later in a 2008 Valentine’s Day meeting, court members rue City risk-taking prior to the collapse.

“Senior market participants knew 12 months ago that they were enjoying very profitable conditions in financial markets,” the minutes note.

“But, in such a situation, not many wanted to listen to the notion that it would end and there was little appetite, despite clear warnings, to stop or adjust behaviours.

“Real-world behaviour was such that markets would not hear messages in such buoyant circumstances.”

Britain’s regulators had also been painfully unaware of how bad things had become, the minutes show.

On September 12 2007 the then chair of defunct regulator Financial Services Authority had said that problems were “ones of liquidity, not institutional insolvency” and “the UK banking system was sound.”

But the next day it emerged in a leak to the BBC that Northern Rock had called in emergency funding from the Bank of England in what directors were told in an emergency meeting was the most significant such rescue since the 1970s.