Barclays Capital will return to court tomorrow in a bid to prevent the publication of leaked documents that allegedly detail how the bank avoided paying hundreds of millions of pounds in tax.

The bank forced The Guardian to remove seven internal memos from its website after lawyers obtained an injunction in dramatic fashion in the early hours of Tuesday morning.

The documents, initially leaked by a whistleblower to Vince Cable, deputy leader of the Liberal Democrats, detail a web of complex transactions through which the bank’s structured capital markets division reportedly made more than £1 billion by exploiting tax loopholes.

Lawyers from Freshfields Bruckhaus Deringer obtained the injunction at around 2.30am this morning (Tue) after the newspaper’s solicitor was woken by a telephone call from a High Court judge and asked to defend the publication of the memos.

Barclays Capital argued that the documents were confidential and had been obtained wrongfully. A spokesman said: “The documents were commercially sensitive, client confidential and Barclays property. No organisation can tolerate theft of its property.”

The Guardian appealed the gagging order at a hearing this afternoon but Mr Justice Blake ruled that it should remain in force until tomorrow. Both parties will be back in court at 10am tomorrow.

The memos reportedly outline a series of so-called “tax arbitrage” structures involving companies in the Cayman Islands and Luxembourg with codenames such as Project Knight and Project Valiha.

Barclays Capital said it did not encourage tax evasion and that it complied with UK tax laws. “All the transactions in the documents were . . . fully disclosed to HMRC, with which we maintain an open and transparent relationship,” a spokesman said.

The legal tussle with The Guardian came after HM Revenue & Customs (HMRC) said it would investigate the schemes outlined in the documents.

A spokesman for HMRC said: “We can’t comment on the details of the tax affairs of any named organisation but we can confirm that we have received papers relating to allegations of tax avoidance in the banking industry which we are studying carefully.

“We are well aware of the type of avoidance structures referred to in recent press reports and HMRC has a very good track record for closing them down.”

Despite perceptions of secrecy and financial trickery, tax arbitrage is legal and is practiced by a number of major banks.

It involves exploiting specific tax loopholes, usually in several jurisdictions, and transactions are carefully structured to comply with current tax laws. They are typically vetted by lawyers at the City’s top law firms, such as Freshfields and Slaughter and May.

The schemes are also routinely disclosed to HRMC, according to a banker familiar with the structures. The taxman frequently responds by amending legislation to close down specific loopholes.

This week Alistair Darling signalled that the Government intends to take a harder stance on tax avoidance by banks. The Chancellor told MPs that HRMC would publish a code of practice on taxation for the banking sector around the time of the Budget next month. Banks in which the taxpayer has a stake, such as Royal Bank of Scotland and Lloyds TSB, will be expected to avoid tax arbitrage schemes even if technically legal.

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