A wave of fraud linked to the scheme is expected to cost the taxpayer as much as £5 billion, and Lord Agnew told peers the Treasury appeared to have “no knowledge of, or little interest in, the consequences of fraud to our economy or society”.

His intervention prompted Rishi Sunak, the Chancellor, to say: “I’m not ignoring it, and I’m definitely not writing it off.”

But a source told The Telegraph the NCA previously approached Mr Sunak’s officials to outline its investigative powers and offer to help, but was “rebuffed by the Treasury”.

Speaking in the Lords, Lord Agnew described a “failure by Treasury or [Department for Business, Energy and Industrial Strategy] officials to understand the complete disjunction between the level of criminality –probably hundreds of thousands of pounds – and enforcement capability. For example, NATIS, a specialist agency, can handle around 200 cases a year; local police forces might double that”.

The Treasury spokesman said: “We already work with the NCA on bounce back loan scheme fraud, who take on the most serious cases. Fraud is totally unacceptable, and we’re taking action on multiple fronts to crack down on anyone who has sought to exploit our schemes and bring them to justice.

“Our Covid support schemes were implemented at unprecedented speed to protect millions of jobs and businesses at a time when families needed it the most.”