The Financial Services Authority (FSA) confirmed today that five of the seven-strong team of watchdog officials tasked with directly supervising Northern Rock have quit.
The FSA said that the supervisors that were working closely on the bank in the 19 months before its crisis last August had left, although it is understood that they have not been fired.
The news follows a Freedom of Information request by The Times newspaper. Northern Rock's supervision came under the remit of the FSA's retail division, headed by Clive Briault, who remains at the regulator.
The FSA declined to comment on when the officials left, but it is thought that some quit before the bank's crisis hit. Today's report in The Times suggested high staff turnover may also have been a factor in the supervisory failings.
None of the staff had been paid compensation for loss of office, the FSA said.
The authority has come under heavy fire over its failure to spot the flaws in Northern Rock's business model, which led to its downfall and ultimate nationalisation last month.
The FSA has already admitted supervisory shortcomings to MPs and is expected to confirm failings in its processes in an internal report into the Northern Rock debacle set to be published this month.
The Newcastle lender's reliance on wholesale money markets for financing saw its funding lines dry up amid last summer's credit crunch, forcing it to turn to the Bank of England for around £25 billion of loans to keep it afloat.
The cross party group of Treasury Select Committee MPs attacked the FSA for being "asleep at the wheel" when the credit squeeze put Northern Rock at risk.
Hector Sants, FSA chief executive, said at the regulator's conference last month that it would "act decisively to address the shortcomings" that emerge from its internal review.
His comments came amid concerns that the internal report into the affair will be a whitewash and not go far enough.