An avalanche of credit crunch lawsuits could overwhelm the court system as funding pressures threaten to dent its reputation as a top centre for global business disputes, the government’s former top law officer has warned.

Lord Goldsmith QC, who stood down as attorney-general last year to enter private legal practice, said in an interview that London’s lucrative litigation market would “be seen to be wanting” unless the courts were geared up for a storm of lawsuits spawned by the current financial crisis.