The liquidators cannot be faulted for pursuing the case, which for them is a fiduciary duty. Yet, whatever its rights and wrongs, it would be unfortunate if they succeeded. Of course, public regulators should be held accountable for their failings. The Bank of England has already paid the price for BCCI by being stripped of its responsibility for banking supervision, which is as it should be.

On the other hand, it is not clear that taxpayers should be required to foot the bill, which is what would happen if damages are awarded.Small depositors have already had the great bulk of their money back under the banking deposit protection scheme. Deposit insurance cannot be held liable for larger amounts, or it would become unworkable and, in any case, larger lenders have to take responsibility for their own affairs, or the financial system loses its moral hazard. In pursuing the case, the liquidators have unearthed some truly shocking instances of regulatory mismanagement by the Bank, which will be much dwelt on in the months ahead. The House of Lords has already determined that dishonesty in this context means establishing that the Bank acted knowingly outside its statutory rights, and furthermore that it recklessly disregarded the danger to depositors of losing all their money The liquidators reckon they have all the evidence they need. To win, the liquidators have to show not just that the Bank acted incompetently, or even negligently, but also dishonestly. On both counts, the Treasury is determined that no precedent should be set. It is one thing to challenge the Bank’s honesty, but if it is also to be held liable for supervisory failure, then the Government and its agents could be accountable for all manner of regulatory cock-ups and the public finances would soon become engulfed by a tidal wave of compensation claims.

Furthermore, if the litigants win anything like the £1bn in damages claimed, the action will exhaust the Bank of England’s reserves many times over and the Old Lady of Threadneedle Street will have to be bailed out by the taxpayer. But in the Bank of England, the liquidators have hit a brick wall.Deloitte & Touche were rather hoping that the prospect of having its dirty linen washed in a public court room would persuade the Bank of England to settle, as most of their other targets already have. Instead, the Bank and its paymasters at the Treasury have dug their heels in. At stake is not so much the Bank of England’s competence as a regulator ­ incompetence is admitted ­ as its honesty. Deloitte & Touche, the liquidators, have against the odds managed to claw back an impressive 75p in the pound. Vigilant legal pursuit of auditors, regulators, hidden deposits and shareholders has succeeded beyond everyone’s wildest hopes. The Three Rivers District Council is the chief, named litigant before Mr Justice Tomlinson because it remains one of the largest creditors, determined to salvage every last penny from the world’s biggest ever banking collapse So far it’s done pretty well.

A top Italian chef is now at Bertorelli’s and lobster thermadore is back on the menu at Caf?ish by popular demand. Paramount yesterday said its four brands were now profitable.Valuing Paramount, however, is rather tricky as there are no forecasts in the market. The City gave up after Chez Gerard last year, and there is also little to compare it with, as listed restaurant groups have all but disappeared into the hands of private equity groups.The business does seem to be getting back on track but it is not out of the frying pan yet. The shares have more than doubled in the past year but with little information to go on, it is best avoided.. Barring a last-minute settlement on the courtroom steps, which all parties insisted last night was virtually impossible, one of the most costly litigations ever mounted finally reaches trial today when Mr Justice Tomlinson begins hearing the case of Three Rivers District Council and others versus the Governor and company of the Bank of England.