Paulson apparently regretted that bankruptcy of Lehman Brothers Holdings Inc. He claims in his memoirs that he would have been prepared for the government to back the failing bank until he learned the firm’s assets were so mis-marked it would have guaranteed a loss to taxpayers.

Then there was the other option which was rescuing the bank by facilitating a sale al la Bear Stearns. Lehman executives had reached a deal to sell the bank to Barclays Plc, on Saturday, Sept. 13. The chief executives of the other New York banks met at the New York Fed and agreed their firms would, along with Barclays, collectively finance the Lehman shortfall but…

Business Week: The U.K. government, however, refused to waive a requirement that Barclays submit the deal to a shareholder vote, in spite of a personal plea by Paulson to Chancellor of the Exchequer Alistair Darling. Darling, Paulson wrote, was concerned that if Lehman’s bad assets hurt Barclays, it might affect the entire U.K. banking system.

“The British screwed us,” Paulson, a former chairman of Goldman Sachs, said he told the U.S. bankers the next day.

Yes, and in the process protected the British taxpayer from even more exposure to toxic debt. Which, as we now know, we had plenty of our own thanks.

Perspectives aside, check out the full article for some interesting extracts on Paulson’s view of the characters that dominated the crisis such as Dick Fuld (surprising), Jamie Dimon (unsurprising) and Ben Bernanke (clever).