Yesterday Barclays may have won on a point of law. But it cannot run away from the wider point of principle: now our whole banking system relies on the support of British taxpayers, how the banks run their business is our business, too.

So long as these banks are sustained by explicit or implicit Treasury guarantees, they have no right to deprive the Treasury of money by running circles round the taxman. The era of industrial-scale tax avoidance by British banks must now end.

That is the point I made to John Varley, Barclay's chief executive, in a meeting earlier this week. Varley explained that one of his primary duties is to Barclays' shareholders – that minimising the tax burden and maximising the returns of a business is what chief executives are expected to do.

This approach assumes that the only banks that have a duty to take instructions from government are those like RBS and Lloyds, in which the government is the majority shareholder.

I disagree. We, as taxpayers, now support all our major banks with explicit and implicit guarantees. All our banking giants, even those in which the government has not taken an ownership stake, depend implicitly on the government's guarantee that they are "too big to fail". And as Barclays continues negotiations to enter into the government's asset protection scheme, it is taxpayers who will be providing unlimited guarantees for its bad debts.

It is intolerable that taxpayers are being asked to pour money into our banks through the front door while those same banks squirrel away money through the back door.

Clamping down on tax avoidance is central to what must be a wholesale shift in our tax system: close the multibillion-pound loopholes that only benefit big business and wealthy individuals, and use every penny of the revenue raised to lower taxes for people on low and middle incomes. That, of course, can only be done by government. Varley and his colleagues may deserve plenty of criticism, but they can't be held responsible for the grossly unfair tax system developed over years under both the Conservatives and Labour.

The present government's record on tackling tax avoidance has been both halfhearted and inept. The opacity and secrecy reinforced by Barclay's gagging order is a blow to the overstretched and under-resourced staff at HMRC who struggle to take on highly paid corporate legal and accountancy teams. Against these odds, HMRC looks like a hapless rodent in a one-sided game of cat and mouse. Lost in the maze of Gordon Brown's absurdly complex tax system, they don't stand a chance.

But improving transparency alone will not be enough. The government must start changing the rules of the game. For a start, it must make clear that until the banks come clean and shut down all their tax avoidance operations they will not benefit from a penny of public money. That goes for the banks we now own, and those such as Barclays seeking to offload their bad debt in the state's asset protection scheme.

It is mind-boggling that the government hasn't made this a term of its various bank bailout packages. And it's ludicrous that Brown has now meekly proposed a voluntary code that gently requests banks pay their taxes in full. This limp-wristed appeal to the banks' better nature demonstrates naivety and a lack of self-confidence in equal measure.

If Brown wants to be taken seriously when he calls on the G20 to outlaw tax havens, he's going to have to deal with the tax avoidance happening right under his nose. Saving the world, after all, must start at home.

For legal reasons, comments are not enabled on this article. To comment on the Barclays injunction please go to our editorial on the subject, which has a pre-moderated thread