On his recent visit to the Tokyo stock exchange, a nervous-looking Alistair Darling was asked whether Britain could not perhaps learn a trick or two from Japan about coping with a banking crisis.

The question itself prompted a polite ripple of mirth from around the room, and a barely disguised smirk from the Chancellor. His non-reply betrayed the searing contempt with which the “Tokyo solution” to a financial meltdown is viewed in the kind of orthodox Anglo-Saxon circles in which he moves.

And yet within a matter of days it became clear that, in spite of the implicit scoffing, Mr Darling must have rather liked what he saw in the Far East. Britain - at least in these early stages in its dealings with Northern Rock - appears to be turning Japanese. And if Mr Darling really is secretly committing Britain to the full horrors of the Japanese instruction manual, nationalisation of a collapsed lender is merely Chapter One in Japan's Bumper Book of Bankruptcy.

Any British taxpayer who has read ahead to Chapters Two to Five will probably be petrified, given that their Japanese counterparts picked up a bill for $500 billion (£254 billion) along the way. And it is, after all, only by Chapter Six (and after about ten years of torment) that we get to the happy ending where the financial system starts behaving normally again.

There are, of course, several key differences between Japan's experiences with its banks and what Britain may now be facing. Japan's problems stem ultimately from lending like drunkards to poor-quality corporations, while Rock's arise from the shaky quality of individual borrowers at home and abroad.

There are also far fewer troubled institutions in Britain to go wrong: Japan's non-performing loans (NPL) crisis was a blight that rotted more than 100 banks to their core.

But the parallels, at least in Chapter One of the playbook, are striking. In Japan's case, the 1998 nationalisations of Nippon Credit Bank (now Aozora) and the Long Term Credit Bank (now Shinsei) followed and then amplified public wailing about what sort of a financial system the country had.

Was it warts-and-all market capitalism, as suggested on the tin, or something altogether more dainty? And if so was it acceptable that daintiness, in this instance, looked remarkably like doctrinaire socialism?

In Chapter Two things got even darker. The bad loan crisis started to regurgitate some unsettling things about the economy: chiefly that there was crookedness in the system as well as the ever-destabilising combo of greed and stupidity. The benevolent spirit that had jauntily vowed to keep Nippon Credit and LTCB on life support was absent when Hokkaido Takushoku Ginko became the first of several regional banks to perish altogether.

Chapter Two was also a phase during which nearly everyone lied. The market was only given its bad news in chunks calculated not to provoke rioting. The full extent of the non-performing loan problems accordingly took about five years to work its way to the light of day.

By Chapter Three the taxpayer started to get an inkling of what it would cost him to keep the financial system functioning and tens of thousands of bank workers employed. It was not pretty. A September 2007 reckoning of the bill - including cash injections, nationalisations, loans and asset purchases - put it at around $500 billion. That figure does not begin to include what was written off in terms of bad loans and shareholder value.

By Chapter Four, and after some six years of torment, the problem appeared to turn the corner. In 2003, with the stock market at its lowest since the late 1980s, two more banks were effectively nationalised, Ashikaga and Resona. Japan had also, by this stage, learnt what to do about potential runs on the banks: the Bank of Japan flooded the system with liquidity, the Prime Minister appeared on television to assure savers that their money was guaranteed and the queues simply never formed.

The Government - then under the tougher control of Junichiro Koizumi and his bullet-proof Financial Services sidekick, Heizo Takenaka - also drew an implicit line in the sand: the taxpayer has taken enough pain, so clear your NPLs, restore your capital adequacy ratios, merge defensively with another bank or die.

The threat worked, and by Chapter Five the banks were clearing NPLs and merging as never before. Chapter Six finds the banks where they are today: spiritually broken but financial healthy. Only the most optimistic economist views them as the engines of some future burst of growth. What may distress Mr Darling is the knowledge that each chapter has been accompanied by a change of Finance Minister.

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