One of the longest-running and most expensive cases in British legal history finally came to an end yesterday as the Bank of England secured £73.6 million costs from the liquidators of the collapsed Bank of Credit and Commerce International.

The move comes seven months after a 12-year suit against the Bank of England by the rogue bank's liquidators was finally aborted in November ending a case described by the judge as "a farce".

The case set new records with one QC making an epic 86-day address to the court between January and July 2004 - a record broken by his opponent's 119 days.

BCCI went bust in 1991 with debts of £10 billion but the liquidators - accountancy group Deloitte - went on to sue the Bank of England claiming misfeasance in a public office over its licensing of BCCI.

Over the eight years before BCCI's collapse, allegations had emerged of links with terrorist organisations, arms shipments to Arab states and South American drug cartels but its licence was not withdrawn by BoE regulators until 1991.

Lawyers for the liquidators told a High Court hearing in 2004 that that regulators "shut their eyes and turned away" from the activities of BCCI.

But the Bank of England's lawyers described the allegations as "nothing short of scandalous" and the £850 million claim was finally dropped in November of last year.

Following the case's collapse the judge, Mr Justice Tomlinson, said: "I became so concerned about the case that I decided both to consult and to warn the Lord Chief Justice about it.

"I told the Lord Chief Justice, then Lord Woolf, that the case was a farce."

The liquidators handed over £73.6 million to the Bank after the collapse of the case.

In an out-of-court settlement the two parties yesterday agreed that the Bank could keep the £73.6 million as well as interest of £1.7 million accrued since then.

A Bank of England spokesman said: "This is an excellent result which allows us to draw a final line under the BCCI case.

"Without this settlement, there could have been several years of assessment hearings which would have added millions more in costs."

BCCI was founded in 1972 by Pakistani financier Agha Hasan Abedi and went on to become a worldwide operation with 14,000 employees at 400 branches in 73 countries.

Its collapse left more than 6,500 depositors trying to get their money back.

Deloitte declined to comment.