Investigators looking into the near-collapse of the Co-op bank yesterday pinned the blame on “failings in management and governance on many levels.”

Former Treasury official Christopher Kelly’s report found “overwhelming” evidence that Britannia boss Neville Richardson, who took over following the 2009 merger, failed to leave the bank “in a good position” when he left in 2011

Mr Kelly was asked to investigate after the bank was found to be facing a £1.5 billion loss

His report also blamed the bank’s “willingness to accept poor performance” and a “tendency not to welcome challenge.”

The board of the wider Co-operative Group is also criticised for failing to properly oversee the bank and letting down the group’s millions of members.

“The roots of the shortfall lie in a merger between the bank and the Britannia building society which should probably never have happened,” Mr Kelly said.

“Both organisations had problems. Bringing them together exacerbated those problems.

“It might have worked if the merged organisation had first-class leadership. Sadly it did not.”

Current Co-op Bank chief executive Niall Booker apologised for “past failings” and said it had been “working diligently” to address them.

The report also focused on a disastrous attempt to update the banks’s IT systems and a failed attempt to buy more than 600 branches from Lloyds.

Mr Kelly said: “The Co-operative Bank executive management failed in its oversight of the executive.

The report said the Co-op Group board “badly let down the group’s members.

“I hope my report will help the group and the bank in their efforts to rebuild organisations of which their members and customers can once again be proud.”

The report was welcomed by the Co-op Group, which recently announced record losses of £2.5bn, largely caused by the bank’s near-collapse.