Co-operation is fast becoming the buzzword of international officials battling to quell global economic upheavals. As ministers from around the world fly into Washington for crisis talks this weekend, the need for a united front is emphasised by all.

Just as collaboration between nations is seen as vital, so, too, intensive teamwork between national treasuries and each country's central bank is regarded as critical. Henry Paulson, the US Treasury Secretary, spoke this week of the intimate solidarity between his officials and the Fed.

Yet if the atmosphere in the US capital smells like team spirit, observers detect worrying signs in London that, far from being one of pulling together in times of trouble, Britain's Treasury and the Bank of England are more than ever pulling in different directions.

Relations between Alistair Darling's Treasury and the Bank, under Mervyn King, its Governor, have been fractious since the crisis erupted last autumn. There have been repeated, dark mutterings of Treasury frustration over the reluctance of Mr King to play ball with the Government's proposals. Relations have been made more fraught by a belief inside Government that Mr King has sometimes been naive in dealing with the media.

After leaks from No 10 and No 11 of annoyance with Mr King, Gordon Brown in the end offered him a new term at the Bank's helm last year. In spite of that apparent vote of confidence, relations are said by insiders to have worsened since. Just as the crisis reaches its most dangerous phase, official exasperation with Mr King appears to have reached new heights.

At the heart of the tension is Mr King's anxiety over “moral hazard” - a concern that bailouts for banks stricken by lax practices will encourage bad behaviour in future, and repeated crises. This justifiable worry has made Mr King keen to limit emergency measures that might be seen as letting the culpable off the hook.

To ministers struggling to stop the crisis spreading, such concerns look too academic and long-term. Some ministers close to Mr Brown are now said to be totally frustrated with the Governor. A Cabinet minister said: “Mervyn can handle interest rates but he is obsessed with moral hazard.”

The result of Bank and Treasury being at odds is seen as being that Mr King has been forced into U-turns over crisis measures.

Having insisted he would not lend to banks for extended periods, he was forced to relent. Having insisted the Bank would not accept mortgage-backed bonds as security, he had to cave in. More recently, days after Mr King emphatically said the shutters would come down this month on his emergency Special Liquidity Scheme for banks, he capitulated and extended it into next year.

There is rampant, if unconfirmed, speculation that the Governor was also reluctant to agree to this week's emergency half-point interest rate cut - a suggestion denied by Bank officials as nonsense.

In the most damaging division yet, Mr King is being privately blamed at the Treasury for talking out of turn to the Conservative leadership on the need to inject billions in capital into banks just as the Treasury was preparing its £50 billion plan to do just that.

There is chagrin in the Treasury after the Tories leaked details from supposedly private talks with Mr King. One senior Treasury official said: “What on earth is Mervyn doing briefing them in such detail? They did not get out of us that we were close to recapitalisation but we know that he has personally favoured it for some time and must have been pushing it . . .”

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