Gordon Brown yesterday attacked the Tory Opposition's plans to abolish the Financial Services Authority and put the Bank of England in the driving seat on financial regulation.
The Prime Minister said at his monthly press conference: "The idea that you return to a system where the monetary authority responsible for interest rates and controlling inflation... should be doing the day- to-day regulation of every individual financial institution is not only potentially a conflict of interest, it is actually the wrong thing to do.
"If you are going to regulate individual financial institutions, then you have got to have an agency that is responsible for doing so. It is sophisticated, it is difficult, it has to be staffed up. If anything, the powers of the Financial Services Authority have got to be greater in the years to come."
Defending the tripartite system he set up as chancellor in 1997, Mr Brown said it was "completely wrong" to suggest it was broken. He said: "There is a consensus in this country. I am sorry that the Conservatives are outside it."
He said the Tory proposals were "the old system, and that didn't work." He said: "The old system left the Bank of England responsible for all these things. We had BCCI. We had Barings. We had all the other problems at Johnson Matthey."
The FSA is facing a potential crisis as it struggles to maintain morale and hold on to staff in the wake of the Tory announcement and a year of polls predicting victory for the party at the next general election. Bosses will attempt to answer their critics at the watchdog's annual meeting today.
Despite Mr Brown's words, the Securities & Investment Institute, the City examination and training body, yesterday released details of a poll suggesting widespread support for shadow chancellor George Osborne's approach among its members.
The internet survey found just over half of the people surveyed in favour of the Tory plans, with 93 per cent supporting a complete overhaul of the current system.