The full extent of the Bank of England’s emergency action to prevent the collapse of the banking system is revealed on Wednesday as it releases previously secret documents detailing its frantic day to day efforts to prop up high street banks during the financial crisis.

Threadneedle Street adopted code names for the high street banks on its rescue list and discloses how close Alliance & Leicester came to needing the financial support from the state that was later handed out to HBOS and Royal Bank of Scotland in 2008.

Publishing documents after a four-year battle with the Treasury select committee, the Bank of England also reveals how ill-prepared it was for the worst financial collapse in modern history, with senior officials changing their minds about the effectiveness of the regulatory system in place as the crisis unfolded.

The minutes of meetings of the Bank’s court – akin to a board of directors – cover the period from the start of the financial crisis, when queues formed outside Northern Rock branches in September 2007, to the middle of 2009, by which time RBS had been bailed out and HBOS rescued by Lloyds TSB.

They show that:

• The court was kept in the dark about the scale of the problems at Northern Rock until the central bank was forced into mounting an emergency funding line.

• The Bank congratulated itself on how well the tripartite system of regulation it shared with the Treasury and the Financial Services Authority worked even after the near collapse of Northern Rock.

• An emergency committee of the court called Transco – set up after the Northern Rock crisis – met seven times in the fortnight leading to the bailout of the banking system in October 2008 and provided tens of billions of support to stop banks collapsing.

• The Bank fully supported the increase in national debt sanctioned by the then Labour government to rescue the banks and considered the action to be no threat to the solvency of the UK.

With the UK’s persistent budget deficit already a key battle ground for the May 2015 election, the minutes provide support for Labour’s argument that the deterioration in the public finances was justified by the need to rescue the banks. The minutes of a meeting held in February 2009 said: “It was suggested that much of the public commentary about the credit worthiness of the UK government was ill-informed. There was no doubt that the fiscal deficit would rise sharply … Although such a large increase would not be desirable in the long run, it was sensible to do that in the short term.”

The minutes are released under the guidance of the governor of the Bank of England, Mark Carney, who replaced Mervyn King, now Lord King, in July 2013. Carney said: “The financial crisis was a turning point in the bank’s history. These minutes provide further insight into the Bank’s actions during the exceptional period – the policies implemented to mitigate the crisis, the lessons that were learnt and how the Bank changed as a result.”

The Bank – whose powers have now been bolstered to take over regulation of the banking system – defended itself by saying that at the time it had no powers to tackle macro-prudential risk and was not responsible for banking supervision and that there was not resolution authority. The coalition tore up the tripartite system after taking power in 2010 and broke up the FSA.

“The roles, in a crisis, of the Bank, the Treasury and the FSA were ill-defined,” the Bank said. “These issues were rapidly identified during the period covered by the minutes.” It said the situation had been rectified by the changes brought in by the coalition.

But Andrew Tyrie, the chairman of the Treasury select committee, said the minutes showed how the Bank’s executive team had reversed its position towards the tripartite system. “At the start of the Northern Rock crisis the court was told by the Bank executive (and by the then chairman of the FSA) how well it was working. Soon, though, it was told that tensions were evident. But before long the governor was telling the court that the tripartite arrangements were ‘not sufficiently workable or relevant to managing a crisis’.”

The banks in trouble were given code names. Alliance & Leicester, eventually taken over by the UK arm of Spanish bank Santander, was known as Tiger; Bradford & Bingley, part nationalised in September 2008, was Badger. RBS was dubbed Phoenix while Lloyds TSB was Lark to HBOS’s Fox. Minutes from November 2007 show a £3bn funding facility was discussed for Alliance & Leicester.

“It was reported that during the last three days discussions had been taking place with a potential UK banking suitor. In those circumstances it was suggested that there was a possibility that the Bank’s swap facility might not be required,” the minutes said.

In October 2008, the minutes of the emergency Transco sub board discussing handing £22bn of loans to HBOS, said: “In order for the government to make progress on a wider solution to the financial crisis, occupied with the problems of Fox on a daily basis. The Bank had informed HM Treasury who were content with the proposed actions.”

The minutes, Tyrie said, showed “the Bank appears to have been a very hierarchical organisation, with clear signs of ‘groupthink’ among its leadership”.

“The executive rarely acknowledged possible weaknesses in its views or, other than grudgingly, admitted that it might have been unprepared for the crisis,” said Tyrie. “The court does not seem to have challenged the executive strongly. The non-executives acted on occasion more as cheerleaders for the executive’s views, and accepted its policy priorities".

“Taken as a whole, these minutes make the clearest possible case for radical reform of the Bank’s governance and the need to address the manifest inadequacies of the archaic approach upon which the Bank were relying during the crisis,” said Tyrie.