The former Government drugs tsar, Professor David Nutt, has said the financial crisis was caused by too many bankers taking cocaine.

The controversial academic, who was sacked for claiming that ecstasy was as safe as horse riding, told the Sunday Times that abuse of cocaine caused the financial meltdown.

"Bankers use cocaine and got us into this terrible mess," he told the paper adding that the drug made them "overconfident" and led to them taking more risks.

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Nutt, who is professor of neuropsychopharmacology at Imperial College, claimed that cocaine was perfect for a banking "culture of excitement and drive and more and more and more. It is a 'more' drug".

He goes on to claim in the interview that abuse of cocaine led to the financial meltdown, "and the Barings crash".

Prof Nutt was sacked from his role as the Government’s most senior drugs advisor in 2009 following the publication of a paper in which he argued there was "not much difference" between the harm caused by riding a horse and taking ecstasy. He also claimed that ecstasy and LSD were less harmful than alcohol.

His most recent foray into the drugs debate was equally controversial.

Last week he attacked the Government over the laws dealing with magic mushrooms, ecstasy and cannabis, which he claims hinder medical research. Magic mushrooms were banned in 2005.

Prof Nutt said he deems the laws surrounding mushrooms "absurd" and "insane" and says it makes it hard to procure one of their ingredients - psilocybin, which is used to treat depression.

The Home Office countered that there was no evidence that regulations were a barrier to research.

Prof Nutt told the BBC: "We have regulations which are 50 years old, have never been reviewed and they are holding us back, they're stopping us doing the science and I think it's a disgrace actually."