Peter Oborne, who had been at the London-based broadsheet since 2010, accused its executives of placing the interests of the bank -- a key advertiser -- above its duty to bring the story to its readers.
He lamented the sharp fall in circulation and the arrival of a "click culture" at the newspaper, which meant stories were no longer judged by their importance, accuracy or appeal to those who actually bought it.
"With the collapse in standards has come a most sinister development," Oborne wrote Tuesday, in a rambling commentary published on opendemocracy.net
"It has long been axiomatic in quality British journalism that the advertising department and editorial should be kept rigorously apart. There is a great deal of evidence that, at the Telegraph, this distinction has collapsed."
He was referring to the recent "HSBC files" case, where documents leaked to French authorities by a former HSBC employee, and then analyzed by the International Consortium of Investigative Journalists (ICIJ) accused the banking giant of using a secretive Swiss banking system to conceal the identities of account holders, and in many cases, help them avoid paying tax.
Oborne pointed out that while the story was splashed across the front pages of its competitors for days, "you needed a microscope to find the Telegraph coverage."
"Nothing on Monday, six slim paragraphs at the bottom left of page two on Tuesday, seven paragraphs deep in the business pages on Wednesday," he wrote.
"The Telegraph's reporting only looked up when the story turned into claims that there might be questions about the tax affairs of people connected to the Labour party." The Telegraph is a politically conservative title, largely supportive of Prime Minister David Cameron's Conservative Party.
Shortly after Oborne's blistering attack, the newspaper hit back. "It is a matter of huge regret that Peter Oborne, for nearly five years a contributor to the Telegraph, should have launched such an astonishing and unfounded attack, full of inaccuracy and innuendo, on his own paper."
An HSBC spokesperson declined to comment on Oborne's claims when contacted by CNN Wednesday.
'Not the first time'
Oborne said this isn't the first time the newspaper had suppressed stories relating to HSBC.
Last year, he recalled working on a piece about how prominent British Muslims had received letters
out of the blue from HSBC informing them that their accounts had been closed. "No reason was given, and it was made plain that there was no possibility of appeal," he wrote.
When he tried to publish the story, he described being "fobbed off" and given non-existent legal issues as an excuse. "When I pushed the point, an executive took me aside and said that 'there is a bit of an issue' with HSBC. Eventually I gave up in despair and offered the article to openDemocracy
," he wrote.
Oborne said the reporting on HSBC is part of a wider problem at the newspaper.
He described the Telegraph's stance on last year's pro-democracy protests in Hong Kong as "bizarre." When rivals including The Guardian and The Times wrote in December about the refusal by the Chinese government to allow a committee of British lawmakers into the former UK colony,
he said the Telegraph remained silent.
In September that year, the newspaper published a commentary by the Chinese ambassador to Britain to coincide with what Oborne described as its "lucrative" China Watch supplement. It was given the headline "Let's not allow Hong Kong to come between us."
When he expressed his concern about the direction the paper was taking, Oborne recalled a meeting with Murdoch MacLennan, the chief executive of the Telegraph Media Group.
"I told him that I was not leaving to join another paper. I was resigning as a matter of conscience.
"Mr. MacLennan agreed that advertising was allowed to affect editorial, but was unapologetic, saying that 'it was not as bad as all that' and adding that there was a long history of this sort of thing at the Telegraph," wrote Oborne.