The first bargain hunter took up his post outside Selfridges at 2am, braving the bitter cold in his quest for a heavily discounted Gucci bag.

At Debenhams the queues began at 6am. Crowds of customers were drawn to House of Fraser from 8am, while River Island was a popular drawcard with more than 200 customers in the queue before 10am.

By close of business yesterday about half a million shoppers had shoved their way around Oxford Street in a buying spree that was mimicked across the country. Images of packed high streets and bursting shopping bags seemed at odds with the deepening financial crisis. But shoppers, who have substantially tightened their belts in recent months, were keen to take advantage of discounts.

Shops, increasingly desperate after a dismal run-up to Christmas and anticipating a tough new year, slashed prices to clear their stock. The result was the greatest bargain bonanza in living memory, with some items reduced by up to 90 per cent.

Selfridges experienced a record-breaking day of sales, with 40,000 transactions made within the first trading hour - the most in its 100-year history. A spokeswoman for the Oxford Street store described the atmosphere as “mental”. She said: “I've never seen anything like it. People were running into the store and grabbing bags. Some women had four or five bags in their hands. Security had to get more people down to the store to help.”

At the Trafford Centre in Manchester, one car park was full before the building opened and crowds were greater than on Boxing Day last year.

The discounts were so large that some shoppers began preparing for next Christmas. Aimee Shipton, 33, began buying gifts for next year at Cabot Circus, in Bristol. She said: “It might sound a bit strange but there's great deals on stuff for my kids.”

Others had waited to buy their Christmas gifts in the sales. Hannah and Andrew Goodge, from Brighton, travelled to the Bluewater Shopping Centre, in Kent, in search of bargains.

Ms Goodge told her children that Santa Claus was “feeling the pinch”, so they would have to wait an extra day for presents. “The kids wanted a Nintendo Wii and some games, but we decided to wait until now to get them their big gifts,” she said. “Hopefully we'll see them cheaper than before and everyone will be happy.”

Despite the credit crunch, designer items proved popular because of significant discounts. The Louis Vuitton area at Selfridges was ticketed because of high demand, with hundreds of people waiting to get inside.

Jace Tyrell, of the New West End Company, which represents businesses in Oxford Street, Bond Street and Regent Street, said that more vouchers than ever were purchased in the lead-up to Christmas. “There's obviously a lot of savvy shoppers out there who have given gifts that will be of greater value a day later,” he said. “We have also noticed that people aren't using their credit cards as much. They are only spending what they have.”