In an interview on the BBC's the Money Programme, US Senator John Kerry accused the Bank of 'not telling the full story'.
'The full story is that the Bank of England knew in April of 1990 that there was fraud. By January of 1991 they knew there was massive fraud. They didn't shut the bank for another six months.
'They formed a tight-knit little group between Abu Dhabi, themselves and the BCCI people to, so to speak, sustain the bank, notwithstanding criminal activity.'
Sheik Zayed of Abu Dhabi holds 77 per cent of BCCI shares.
Senator Kerry added: 'So they were going to allow the criminal activity to be made up for by Abu Dhabi supposedly buying themselves out of the predicament. I don't know what you call that if you don't call it covering up a fraud.'
He was speaking last night after the Bank on Friday attacked a report from the US Senate committee, chaired by Senator Kerry, which described the Bank's regulation of BCCI as 'wholly inadequate'.
The Bank said in a statement: 'The Bank states in unequivocal terms that the allegations that it acted in some way in collusion with various parties, including BCCI, are wholly without foundation.'
The wording, unusually strong for the Bank, showed the depth of its annoyance with the report by the Senate's terrorism, narcotics and international operations sub- committee.
The Bank of England statement said the US committee did not receive evidence from the Bank, have access to its documents or seek to check any facts with it.
Price Waterhouse, auditors to BCCI, also rejected the findings as 'a hotchpotch of hearsay, conjecture and unsubstantiated assertion'.
But Senator Kerry said last night that the Bank had refused to allow his committee access to documents. 'We would have loved to see those documents,' he added.
BCCI was closed down in July last year in an international operation co-ordinated by the Bank of England.
The Bank said last night: 'We stand by what we said on Friday.'