Executives at two banks alleged to have been defrauded out of over £750 million held “off-the-record” meetings to discuss the problem, a court in London has heard.

AIB and Bank of Scotland met in early 2009 to discuss the dealings each had with Achilleas Kallakis and Alexander Williams, it was said.

Mr Kallakis and Mr Williams, both 44, are alleged to have defrauded AIB of £740 million and a further €29 million from Bank of Scotland by applying for loans with false guarantees.

The AIB loans were used to buy a string of prestigious properties in London and the southeast of England, while the Bank of Scotland loan was taken out to turn a clapped-out ferry into a super-yacht, it was said.

Peter Whitehead, a former director of Bank of Scotland’s marine finance division, revealed in court yesterday that there had been meetings between the two banks over concerns they had been defrauded.

He said the meetings had first been mooted by senior managers and were arranged by solicitors working on behalf of the bank. He said there was nothing unusual about them being off the record.

Pressed by George Carter- Stephenson QC, for Mr Kallakis, he denied any knowledge of an alleged financial connection between disposing of properties bought with AIB loans and HBOS.

Mr Whitehead said he had given AIB representatives “some documentation” during the first meeting but “couldn’t recall” what it was. He denied that Bank of Scotland had originally viewed the €29 million was simply a “loan gone bad”.

Mr Kallakis and Mr Williams both deny conspiracy to defraud, forgery, fraud by false representation, money-laundering and obtaining a money transfer by deception.

The trial continues.