Darling: We must show some humility

In an interview with The Daily Telegraph, he said there was a "collective responsibility" for the way the bonus culture in the banks had been allowed to develop, with "lots of lessons" to be learned by governments and regulators.

His contrite tone appeared to contrast with Gordon Brown who has consistently argued that the current crisis originated in the United States with the collapse of the sub-prime mortgage market.

Mr Darling told the paper: "There are a lot of lessons to be learnt by regulators, governments, all of us.

"The key thing that went wrong was that a culture was allowed to develop over the last 15 years or so where the relationship between what people did and what they got went way out of alignment, especially at the top end.

"If there is a fault, it is our collective responsibility. All of us have to have the humility to accept that over the last few years, things got out of alignment."

Mr Darling also conceded that there were problems with the way the system of financial regulation developed in recent years.

"There are some very hard questions to be asked about the regulatory model we have operated for the last few years," he said. "The model of us saying to them (the banks) 'You say it's OK to us and we'll go along with it' has failed. You should regulate according to risk ... financial services have to be properly run and supervised."

Earlier Children's Secretary Ed Balls, a former Treasury adviser and later Treasury minister when Mr Brown was Chancellor, also acknowledged that the Government had not been tough enough when it came to regulating the City.

But he denied he had put pressure on the Financial Services Authority or the Bank of England to adopt a "lighter" regulatory approach.