The financial intelligence regulator has accepted Westpac’s admission it broke the law 23 million times but will continue to pursue the bank for a series of “unquantifiable” breaches as the parties head for a costly courtroom battle.

AUSTRAC’s terse reply to the bank's defence describes a number of the bank’s arguments as irrelevant or wrong, showing just how far the two groups are from settling a damaging and costly case that may cost the bank more than $1 billion to bring to a conclusion.