High stakes poker games, a "cow eating club", brutal sackings and a team-building exercise in which an executive was strapped into a mock electric chair.

This was at the heart of this week's legal battles over tax avoidance, according to whistleblowers. They paint a picture of life in which summary dismissal, ritual humiliation, and social events to match the tales of famous banking excesses in the 1980s, are the norm.

The sources say this management culture has been integral to creating what is in effect a tax avoidance factory at Barclays headquarters at Canary Wharf. Avoiding tax by exploiting legal loopholes was not seen as something questionable but rather the raison d'etre of the Structured Capital Markets department. "There's such a macho culture in SCM and the deals are so big you never say billion or million, you just say 16 bucks or 16 quid which meant billion," one source said. "The tax avoidance was so big it became the engine of growth for the whole of the investment banking arm."

The energy to keep creating new trades that could allegedly generate hundreds of millions in tax profits came in part from fear. Roger Jenkins, the chief executive of the SCM division, is said to have called in senior directors to announce that he was about to fire one of themon the basis of what deals they went out to do next. "It wasn't a joke, he meant it," the source said.

On several occasions, the sources allege, staff have come in to work to find an email from Jenkins saying a colleague no longer worked there. Sackings, which might be provoked by nothing more than failure to understand the unwritten rules of deference to the hierarchy, involved being marched out of the building by security guards.The office is reportedly rife with internal politics. In one example, a managing director who bought himself a Bentley was told by Jenkins that it was a very nice car, too nice in fact for Jenkins to want to see it outside the office. Thereafter the executive's chauffeur would drop him out of sight around the corner. According to one whistleblower, a secretary was fired by another executive for booking a taxi that was a Volvo rather than an S class Mercedes.

While Jenkins excels at corporate politics, he is now increasingly taken up with Middle Eastern operations. The brains of the SCM division are said to be Iain Abrahams. A tall Scot , Abrahams has recently been elevated to chief risk officer. Insiders refer to him as "Abes'' and describe him as "very, very clever, with an encyclopaedic knowledge of tax and accounting law".

The most lurid tales come from team-building away-days. Free cigars and champagne would apparently flow and at night poker tables would be set up. "There's a babies' table and a big boys' table. The big boys' table was all about showing who has got the biggest dick. Jenkins and Abes were said to have a couple of hundred thousand pounds on a hand between them. One executive made the mistake of beating Jenkins. He later said his bonus was reduced by the amount of his poker winnings."

On one away day, according to sources, Abrahams came on to the platform dressed in a Las Vegas showman's costume. Behind him were a series of props hidden behind sheets. One was an electric chair. As he strapped a director in, he had the line from the rock song that goes 'I hate you and I hope you die' playing. It was part humiliation, part making the point that anyone who gives away Barclays' secret 'know-how' on these deals would get it." Abrahams, according to one whistleblower, was also responsible for running projects that were kept completely under wraps, even from other members of the team. "A couple of executors would go missing for a while to work on them and were always very reluctant to talk when they came back. They were said to be deals for huge amounts, but it was all very secretive. The SCM file room has a locked file and you never find out what is in it." Some aspects of this culture were not exclusive to Barclays. One source has described the activities of the Cow Eating Club, a group of structured financiers across the industry who would get together for lunch on occasions at a French restaurant near Smithfield market in London called Le Café du Marche. Here the bankerswould each order a whole cote de boeuf, marked on the menu as for a minimum of two people, and wash it down with a bottle of vintage red wine.

One source estimated that the SCM group had up to 70 tax trades in action each year. He said that government efforts to crack down on tax avoidance had in fact stimulated new forms of it. "There were two kinds of deals: the Accruals ones which brought in income over an extended period, and the Pop ones, which made money instantly. We had moved away from Pop, but then as more anti-avoidance rules came in, the deals that did work got bigger and bigger to make up for the ones we'd lost and we started moving back towards Pop, do it quick, before it's closed down."

The Guardian put these whistleblower allegations to Barclays. It did not respond to individual points but said in a statement that it complies with taxation laws in the UK and in all the countries where it does business. It added that financing often has tax implications and both it and its clients have a fiduciary duty to shareholders to manage their tax affairs legally and efficiently. It voluntarily discloses all transactions with a tax implication to HMRC with supporting papers and explanations, and provides them with further explanations and documentation as required.

"We place great emphasis on filing and meeting our HMRC (HM Revenue and Customs) compliance obligations in a prompt, transparent and timely manner. This has enabled HMRC to carry out detailed and robust assessments of our tax affairs with an emphasis on our structured capital market transactions."

It also said that Barclays was one of the UK's largest taxpayers, contributing just under £10bn to the exchequer in the last five years.