Brought together to promote a new best-of compilation, Peter Hook and his bandmates can barely bring themselves to speak to each other. They reveal where it all went wrong … separately

'The truth is," says Peter Hook, the bassist first in Joy Division and then New Order, "Bernard's a twat and he always has been." It would seem all is not well in the New Order camp. Indeed, calling the lead singer of your group – someone you've been friends with since 1967 – a "twat" would suggest there is no New Order camp.

"We're a bunch of fat old men arguing," Hook says. "It's pathetic really, but we're all happy to keep on doing it." That "it" is not speaking to each other. In fact, "it" is agreeing there is no future for New Order at all, despite a new best-of the band are ostensibly promoting.

"No, there's none," agrees drummer Stephen Morris, part of the trio doing their part of the interview separately from Hook. "There's no future for New Order. It's hard to draw a line under everything, but I think we have."

"Too many things have been said and done," nods Bernard Sumner, the "twat" of Hook's complaint. "We've spent all our life as an outfit with principles and ideals and what Peter" – Sumner makes a face like some appalling insect has just flown into his mouth – "has done goes against everything we've stood for."

So I put Hook's crimes to him. First, the rest of the band has a deep-seated problem with him buying the rights to the name and brand of the Haçienda, the old Factory records nightclub, while he was still working with them. ("The writing was on the wall from that point," Sumner had said.)

Hook laughs out loud, and doesn't stop for some time. "That's hilarious! I've been going to weekly Haçienda meetings since 1986 – Bernard's never been to one! Rob Gretton [the band's manager] knew we should buy the name and rights and I gave him £5,000 to do it. No one else was ever interested for 10 years until the first compilation album was released [The Best of New Order, in 1994]. Bernard's not cared about the Haçienda since 1982!"

Second, he formed a band called the Light, who play whole Joy Division albums in their live shows and have released an EP of Joy Division covers. (Sumner: "There was a way back from that other stuff. But not with what he's doing with Joy Division.") "Oh bollocks! Bernard never even liked playing old songs," Hook says. "He thought Joy Division were depressing. If I'd asked him for permission, they'd have told me to fuck off anyway."

Somewhere among all this to-ing and fro-ing is the memory of an incident that Hook won't talk about. "It's personal," he tells me, "and I've told you too much already. But it happened on the last Brazilian tour."

Hook says Sumner was always trying to manage the band. He hated that, he says, and Morris, for one, knew all about Hook's feelings. "He couldn't stand being told what to do by Bernard either," Hook says. "When I left they put out this statement like it was all a surprise. I called Steven and said, 'What's this bollocks all about?' and he said – and this is a direct quote" – Hook affects a breezy whine – "'You know me, Hooky, whatever way the wind blows.' This situation really hurts and someone, eventually, will have to climb down."

But it doesn't look like anyone's going to be doing that any time soon. The two separate camps have gathered – separately – today to talk about Total, the first compilation of properly remastered New Order and Joy Division material. It seems like the most straightforward idea for an album ever and what it does rather succinctly is point out the vast gulf between, say, the tinny, skeletal rattle of Joy Division's Isolation and the great, fat disco steam train of Blue Monday, a song recorded just two years later.

"We did actually do something wonderful," Hook says. "And not just with one group, but with two."

There isn't a band in history to have so radically changed how they sound and what they do in such a short time. The fact they can't bear to be in a room with each other, much less play these incredible songs together, makes the whole thing feel rather sad. That the row centres around business isn't much of a surprise: New Order, of course, are frequently cited as a band who really weren't terribly wise with money, and who were not well advised about what to do with it. Everyone knows the myth of how their Blue Monday single lost money despite being the best selling 12in of all-time, because of the cost of its sleeve. They once decamped to an expensive studio in Ibiza only to find their work being constantly interrupted by coachloads of holidaymakers who had bought tickets for BBQs with the band. "One of them vomited on the table-tennis table," recalls Gillian Gilbert.

Then there was the Factory nightclub, the Haçienda, built with New Order's money, and which was empty for years on end. When people finally started filling its dancefloor, during the first flowering of acid house in the late 1980s, all the punters were so walloped on ecstasy they completely ignored the bar – any successful nightclub's major money earner. Factory eventually collapsed with debts of more than £3m in 1992, though New Order escaped to the majors. By that time, though, finances weren't their only problem: in 1993, they gave up working together for five years because, to quote an interview they gave at the time, "we were getting on each other's nerves".

But that story doesn't seem particularly real when you're standing outside the Cheshire farmhouse Stephen Morris shares with Gilbert, New Order's fourth member and his wife, where all the members bar Hook are gathered. For one thing, there's a vast new outhouse that is presumably, though we never get to see inside, full of Morris's famous collection of military vehicles. Inside there are heavy granite worktops, new bathrooms, a live room featuring full-size Daleks and Cybermen and a studio brimming over with highly desirable kit. Though they are now comfortably middle-aged – when Sumner complains of an upset stomach, he grimaces and says: "As you get older, you always think this might be the big one" – the surroundings reveal that for all their none-more-deadpan allure, New Order are still – and have been for a long time – a very big deal indeed.

"It is true that the record company are always thinking of new ways to flog New Order to people," Morris smiles, apologetically.

The band's most brilliant singles– the likes of True Faith, Sub-Culture or Everything's Gone Green – sound utterly fresh, but they date from a time when cassettes sent over from friends in New York or Berlin were the quickest way to hear new music, when a simple sampler could cost £20,000, when high-end music shops would insist that musicians make an appointment to go and view their synthesisers.

"I vividly remember being sat on blue and grey wooden steps in some New York club watching people dance and thinking: 'Wouldn't it be great if they were dancing to us?'" says Sumner, remembering the point at which New Order made the decision to shed the muted shades of their previous existence and embrace the full colour palette of dance music. "The equipment was hideously expensive, so we made our own from electronic kits with a soldering iron. If it didn't work well, we'd rebuild it, but it was very crude. I remember the drum machine we used worked fine until you shone a torch at it. Then it froze."

"The sound was in our heads," Morris says, "but the machines were barely capable of doing it. The future was happening, but often it sounded a bit shit."

At one gig, on the same bill as Miles Davis, a roadie pushed a keyboard's pitch wheel up so it was out of tune for the whole show. "And we'd been drinking Elephant beer all afternoon," Gilbert says. "We drank the place dry and it was midnight before we went on. All I remember is Miles Davis watching from the side of the stage absolutely pissing himself."

In the mid-80s, when they were signed to Quincy Jones's Qwest label in the US (for a while the only other signing was Frank Sinatra), the band toured with an electronic set-up that meant they could play an encore without actually being on stage. "We'd press a button and the gear would play it," smiles Morris. "But we had a horrendous riot at a gig in Boston. They didn't appreciate us mucking about like that."

The next morning Sumner got a call from the boss of Qwest's parent company, Warner Bros, demanding to know what was going on. "We started playing encores after that," he says.

Gilbert, Morris and Sumner look back on their career and see just as much humour – sometimes deliberate, sometimes unintentional – as Hook does ("Joy Division? Four tossers from Salford," is how he remembers that most mythologised of bands), which only makes their current, Pink Floyd-style impasse all the more unfortunate.

"When you get in a band you never consider the day it'll all just stop," Morris says, looking suddenly a little lost.

"We were important to people," Hook says. "Kids were born and people were buried to our music. I know that our all bickering physically hurts the fans and destroys what they loved."

"Everyone's entitled to start a tribute band," Sumner says, as he gets ready to head home. "Peter could have done a lot of things and we could still be friends, but now he's taking our actual heritage just like he took the Haçienda. It's hardly surprising we're so angry about it."

Total: From Joy Division to New Order is out now on Rhino.