There will be mixed emotions, some red faces and notable absentees at One Angel Square in Manchester when the new headquarters of the Co-operative Group is officially opened by the Queen and Prince Philip today.

The event takes place during celebrations marking the 150th anniversary of the Co-operative Wholesale Society, but it coincides with the most devastating blow that the co-op movement has suffered in its history.

The Co-op Bank has lost its status as a co-operative, up to 50 Co-op Bank branches are to close, and Co-op employees laid off. The Co-op Group has announced that there will be no dividend for members this year and the historic link of the bank with local authorities across the country is to be axed.

At the half-yearly meeting in Manchester last Saturday I called for the chair of the Co-op Group, Len Wardle, to stand down and a new chair elected because this crisis is not the failure of the co-operative model of business but one of governance for which the group board and its chair are responsible.

It is well established that co-ops across the globe and throughout history have been successful in business and have delivered the well-being of millions and this crisis at the Co-op Group is plainly a failure of governance which has to be addressed.

When Leeds Labour Euro-MP I was chair of the European Parliament's development committee and spokesperson for the Socialist Group in the European Parliament. I have visited and been inspired by the success of co-ops, savings groups and micro-credit projects across the developing world especially in Africa and in Bangladesh with Muhammad Yunus at the Grameen Bank.

And the damage caused by the failure of the Co-op Bank is a matter of great personal sadness having worked in education, business, local government, football, rugby league and the political sections of the co-op movement for much of my adult life.

I decided to leave the BBC where I had worked in television and radio in Leeds, Bristol and at Television Centre in London in order to become education officer with the Leeds Co-operative Society as I wanted to be part of a movement committed to democratic ownership and control.

When I became a project co-ordinator at the Leeds headquarters of the Industrial Common Ownership Movement which later merged with the Co-operative Union and is now named Co-operatives UK, my belief in the co-operative model was further strengthened.

My conviction that a co-operative business owned by members is more efficient and fairer than one owned by shareholders driven by the profit motive remained with me when I became the co-operative development officer for Kirklees Council in West Yorkshire.

For the past six years Len Wardle has been chair of the group and responsible for the supervision, scrutiny and holding to account of executives. He has overseen a scenario of monumental blunders which have led to what he himself has described as "a mess." The new group CEO, Euan Sutherland, now deserves the support of a new chair who will also hold him to account on behalf of the board of directors.

At the half-yearly meeting Mr Sutherland called for more openness and transparency by the group and it would be helpful if he would now address this by allowing the Co-operative News to be available to staff, members and customers through the network of co-op stores.

The new CEO has taken swift action in replacing senior executives but this has not been matched by the urgent need to address the failure of governance.

The former chair of the Co-op Bank, the Reverend Paul Flowers, who has resigned, juggled simultaneously his roles of Co-op Group director, Bradford city councillor and Methodist minister and now the bank is no longer a co-operative. And the damage was not limited to the Co-op Group but did no favours for the city council or Labour Party in Bradford and perhaps the Methodist church.

The failure of the Co-op Bank does nothing for the morale of the thousands of Co-op employees who daily face customers in our food shops, pharmacies and funeral parlours. And it is hardly a boost for the campaign to persuade the public to shift savings from profit-driven high street banks owned by shareholders to co-ops and credit unions owned my members.

It has presented an open goal to the enemies of co-ops and is a setback for the campaign to end the exploitation of those in need of credit by the commercial banks, payday lenders and loan sharks.

It is also of concern that the co-operative movement appears to be sliding into the view that "independent is good" and "co-operative is bad" in the same manner that successive governments have promoted the myth that "private is good" and "public is bad."

It a bit rich that after six years in office, Len Wardle who was elected through the democratic procedures of the Co-op, has joined the ""co-operative is bad" brigade and says his successor should be an "independent."

There is an urgent need to tackle the failure of governance by the Co-op Group by both electing a new group chair and assembling a task force of relevant skills and experience from both within and outside the co-op movement to support a new chair and directors.

Elected members of regional boards and area committees are too often kept in the dark about group decisions on the excuse of "commercial confidentiality," with managers regarding elected members as interfering and a nuisance.

The failure of elected directors of the Co-op Group to scrutinise, supervise and hold to account executives is the root cause of the worst disaster in the history of the co-operative movement and the answer is more democracy and not less.

The wise advice of the former EU commissioner and French socialist Jacques Delors was "never waste a crisis" and now is the time to use the current crisis to intensify all our efforts to defend and promote the principles and values of co-operation.

And no-one should be shocked if the Queen is confused when she arrives at One Angel Square in Manchester as to whether she is attending a co-operative celebration or a wake.

n Michael McGowan is a member of the Leeds and Wakefield area committee of the Co-operative Group and former Labour MEP for Leeds.