Lord Myners has called for a radical overhaul of the embattled Co-operative Group if the 150-year old institution wants to survive.
The former City minister warned the Co-op Group's board was "not competent to do the duties required of it" and recommended a complete shake-up of governance to "save" the embattled organisation.
Lord Myners, who joined the board in December but resigned last month, said he had found a "denial of responsibility, corrosive suspicion and protection of self-interest" among the board.
His 180-page report comes just 10 days before Co-op holds its annual meeting, which will see a vote on reforming its structure. Myners said he had no idea which way the vote would go.
He said: "The decision lies in the hands of the elected democrats. I have done all I can do."
But he also criticised the handling of the meeting pointing out that the Co-op’s ordinary members and the press will be barred from attending.
He pointed out that "fewer than 40 people from the eight million members are eligible to sit on the national board and not a single one has a commercial retail background".
Co-op had to give up 70 per cent of the shares in its bank to hedge funds after a £1.5 billion gap appeared in its balance sheet last year. Euan Sutherland resigned as chief executive earlier this year describing the Co-op as "ungovernable".
Lord Myners said that "deplorable governance failures" had been exposed over the past year, which led to the "near collapse of the group" and warned that radical changes had to happen.
"If it does not take place the Co-op will continue to decline and it is quite likely that the banks, who already have some say in things, will take a greater interest."
Lord Myners added that the group’s membership must have far greater control, with one member one vote.
He criticised the Co-op’s political donations, which were more than £800,000 in 2012, saying they were “decisions made by insiders at the very top, several of whom were members of the Co-operative Party national executive”.
His recommendations come as former Co-op Bank chairman, Paul Flowers, pleaded guilty to drug possession at a Leeds court following allegations that he bought and used Class A drugs, including cocaine. He was fined £400 and ordered to pay £125 costs.
Flowers, dubbed the 'Crystal Methodist', was arrested last year as part of a police investigation into claims that he bought drugs and later released on bail.
He stepped down as the Co-op Bank's chairman in June and serious doubts have since been raised about his competence in the role amid claims of illegal drug use, inappropriate expenses and drink-driving.
He was suspended by both the Methodist Church and the Labour Party following allegations that he bought and used illegal drugs.