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This £5 note was issued in 1947. Known as a ‘White Fiver,’ this note’s design had remained essentially unchanged since being introduced in 1793.

It was war on all fronts – even the currency presses.

Historians have long known about Nazi Germany's attempt to destabilize the British economy by churning out fake currency. But newly revealed files show just how effective the scheme had been.

The release of several MI5 reports shows that Europe was being flooded during the war with top-quality forgeries of pounds sterling.

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"In general it can be said that the German object of destroying confidence abroad in Bank of England notes has been achieved," wrote Sir Edward Reid of MI5, the UK's domestic intelligence agency, in a now-public report drafted in August of 1945.

"At present no one will accept a Bank of England note in any neutral country of Europe except at a very large discount and it is difficult to see how the authorities in this country can deal with the situation and restore confidence in the British currency except by calling in all the outstanding Bank of England notes of denomination of £5 and over and making a fresh issue."

The bank was forced to stop issuing most denominations and eventually produced new and more modern versions of all bank notes.

Until then, forgery was much easier than it is now. The British £5 note used during the war, for example, had been essentially unchanged in a century and a half. Known as the 'White Fiver,' it was printed in black on creamy white paper.

The German counterfeiting scheme, dubbed Operation Bernhard and staffed by inmates at concentration camps, was set up in anticipation of an invasion of the United Kingdom. When the Germans lost the Battle of Britain, their failure to gain air supremacy rendered an invasion implausible.

From then the operation was aimed at undermining the British pound and generating currency to pay for war goods. The false notes also found their way into the hands of German double-agents, which sometimes helped the British identify them.

The newly released material details numerous instances of false currency being found on people whose purported identities were questionable. With stereotypically dry British wit, a man identified as HJL Withrington posited in a 1945 report that it was "a little unlikely" that five Dutch visitors to the country would all be "armed with £5 notes from the same series."

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The false notes began to filter their way back to the UK in large numbers following the Normandy landings on D-day, after which some Allied troops engaged in black-market trading. In his report, Mr. Reid wrote that the Polish and American soldiers were the worst in this regard but acknowledged that "British troops undoubtedly did their share."

In total, the Germans are believed to have produced more than £130-million in fake currency, the equivalent of about 10 per cent of the total in circulation. In an ironic twist, some are said to have been used by Jewish groups to help bring people and equipment to the Middle East.

Updated banknotes were gradually issued, beginning with the £5 note in 1957, a change that did not please everyone. Ian Fleming had his most famous character, James Bond, disparage the new notes in the 1959 book Goldfinger.

"I'm not very impressed by the new ones," Bond said. "They look like any other country's money. The old ones were the most beautiful money in the world."

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