The Office of Fair Trading (OFT) had been criticised for deciding not to take legal action against high street banks' charges for unauthorised overdrafts which cost consumers £2.6bn a year.

The move follows a last month's ruling by the Supreme Court judgement that the OFT did not have the power to decide what was and was not fair under the Consumer Contracts Regulations.

Speaking on today's programme Mike Dailly, the director of the Govan Law Centre, which has been campaigning for a review of the charges, said that it was "a very dark day for consumers" who had, he said, "been thrown overboard without a life-jacket".

He added that it was "immoral" for the poorest customers to pay for the wealthiest and claimed that 12 million people were effectively subsidising bank charges for 42 million others.

Peter McNamara, the former managing director of Alliance and Leicester and a former head of personal banking at Lloyds TSB said that although "everyone feels they they are high", fees for unauthorised overdrafts pay for the provision of free banking for millions of customers.

Mr McNamara added that, as these fees are reduced and new accounts are introduced, this will increasingly mean that free current account banking will become rarer.