Whistleblower statement | They're sorry, but are they guilty? | Analysis - Sam Coates | As it happened - the hearing in full | Comment: How did they score? | Fund managers win libel damages

HBOS sacked and gagged a senior executive who four years ago warned the board of the bank that they were taking excessive risks, according to evidence given in Parliament this morning.

MPs on the Treasury Select Committee were given details of a submission from the former head of risk at HBOS who claimed that he warned the board repeatedly that they were taking risks with financial stability and consumer protection.

Paul Moore, a former partner of KMPG and head of group regulatory risk at HBOS between 2002 and 2005, accused the bank of "a total failure of all key aspects of corporate governance" and said that he was repeatedly rebuffed and thwarted when he tried to register concern.

In a highly sensitive development he also pointed the finger of blame firmly at Sir James Crosby, the former chief executive of HBOS, who is deputy chairman of the chief City regulator the Financial Services Authority and a senior adviser to the Government.

By dismissing him without good reason HBOS had broken in-house rules and then replaced him with a "personal" appointment of a woman sales manager with less experience of risk management and against the wishes of other directors.

In his submission to the committee Mr Moore said that he warned HBOS it was growing too fast, warned that it was culturally indisposed to being challenged and warned that its sales culture was "significantly out of balance with their systems and controls".

He also said that he told the board the bank needed to slow down but that he was over-ruled by the then finance director when he tried to get his views put in writing in the board minutes.

After being sacked he went to an industrial tribunal, at which point HBOS settled for "substantial damages".

"I was subjected to a gagging order but have decided to speak out now because I believe the public interest demands it," he said in the submission.

The details of that agreement were unclear today but Mr Moore gave an interview to the BBC in October criticising the approach to risk taken by HBOS.

"I think a concern everybody had [was] whether or not the business was under control," he said, claiming that the bank's priority was switched from risk management to growth under Sir James, who was subsequently appointed by the Government to lead a review of the mortgage market.

Times Recommends

• ‘Lame duck’ fear for FSA as chief quits
• Storm over bailout of EU's most ailing economy
• Northern Rock to drop 100% savings guarantee