Revenge of the whistleblower.

Wow. There goes Sir James Crosby, who has just announced he is resigning as deputy chairman of the Financial Service Authority.

This is a big blow for Gordon Brown who rates Sir James so highly that he put him in charge of giving the government advice on how to get the mortgage market moving again.

The news has caught the Westminster village on the hop and will dominate the rest of the day and Prime Ministers Questions in a few minutes time.

This really is the revenge of the whistleblower. Sir James was accused yesterday by Paul Moore, the former head of risk at HBOS, of presiding over a culture of risk taking when he was at HBOS that ignored his warnings about the bank being overexposed.

Mr Moore, who had formal responsibility for HBOS policy and its compliance with FSA regulations, gave the Treasury committee a devastating insider's account of how the bank ignored his warnings of financial meltdown. To be in the bank as profits went through the roof was like being caught in the fable of the emperor's new clothes, he said in a memo of evidence.

"Anyone whose eyes were not blinded by money, power and pride" could see that economic growth was based solely on excessive consumer credit based on massively increased property prices, caused by that excessive credit, said Mr Moore.

For repeatedly challenging and trying to rein in HBOS's risk, Mr Moore claimed he was dismissed on the instruction of Sir James Crosby, then chief executive. He sued the company for unfair dismissal under whisteblowing legislation and was compensated but subject to a gagging order which he has now broken.

Sir James left HBOS soon afterwards to become deputy chairman of the FSA - which monitors risk lending by banks. His accusations go right to the heart of how the banks went from boom to bust and send the blame for deregulation bouncing of the door of 10 Downing Street. Enough for now, off to PMQs.