Gordon Brown has been accused of the 'height of hypocrisy' for allowing the state-owned Northern Rock to run an offshore bank in the Channel Islands while he is leading a global campaign against tax havens.

Northern Rock Guernsey boasts on its website that it is a 'major competitor in the offshore retail savings market' and that 'expatriates, foreign nationals or UK residents wanting to take advantage of tax planning can choose from a range of competitive products'.

Tax planning is a euphemism used by financial experts advising on legal ways to avoid tax.

Accounts filed in St Peter Port, the capital of Guernsey, reveal that the bank had deposits and other assets of £1.1bn at the end of December 2008.

Sunday Times