Former Co-op bank chairman and Methodist minister Paul Flowers pleads guilty to drug possession

(Photo: REUTERS / Dave Thompson)Paul Flowers (C), the former chairman of the Co-operative Bank arrives at Leeds Magistrates' Court in Northern England May 7, 2014.

LONDON, May 7 (Reuters) - Former Co-op Bank chairman Paul Flowers pleaded guilty on Wednesday to possessing illegal drugs, adding to a series of blows to the image of the 150-year-old customer-owned Co-operative Group in the past year.

The former Methodist minister, 63, of Bradford in northern England, admitted two counts of possessing Class A drugs and one count of possessing Class B drugs during a 15-minute hearing at Leeds magistrates court that attracted a large media crowd.

A police spokeswoman said he was fined 400 pounds ($680) for possession and was ordered to pay 125 pounds in costs.

Flowers, a one-time Labour politician, was arrested last November after an investigation triggered by allegations in a newspaper.

He had left the Co-op five months earlier, when the bank brought in new management to oversee a restructuring and deal with a 1.9 billion pound funding gap.

The scandal raised questions over the suitability of his appointment to the bank, favoured by customers for its perceived ethical stance, when he had no banking qualifications and had been suspended indefinitely from the Methodist church.

His arrest also ramped up pressure on the Co-operative Group, which posted a loss of 2.5 billion pounds in 2013 and saw an exodus of top executives, putting its future into question.

In a report on Wednesday, Paul Myners, who served in Britain's finance ministry and was chairman of retailer Marks & Spencer, urged Co-op officials to back on May 17 a radical reform of its management structure if the group is to survive.

Myners said the current management structure at the Co-op, whose businesses range from supermarkets to funeral parlours, is "not fit for purpose".

The Co-op group is owned by its 7.2 million members and retains a 20 percent stake in the Co-op Bank that fell under the control of bondholders including U.S. hedge funds last year after a restructuring.

(Reporting by Belinda Goldsmith; Editing by Hugh Lawson)