Barclays boss Bob Diamond resigns

Barclays chief executive Bob Diamond dramatically resigned with immediate effect today in the wake of the bank rate-rigging scandal.

The American, who has faced mounting calls to step down, said the decision was the hardest he had had to make in 16 years at Barclays.

His resignation was welcomed by Chancellor George Osborne, who called the move 'the right decision for Barclays' and the 'right decision for the country'.

But while Mr Diamond has resigned, chairman Marcus Agius has made a spectacular return.

Having resigned yesterday, Mr Agius is now reinstated as ful ltime chairman of the bank, and must now find a replacement for Mr Diamond.

Mr Diamond said: "I am deeply disappointed the impression created about what Barclays and its people stand for could not be further from the truth."

Mr Diamond's resignation comes after the bank was fined a record £290 million by UK and US regulators for manipulating the rate at which banks lend to each other, sparking a parliamentary probe.

The 60-year-old said today: "My motivation has always been to do what I believed to be in the best interests of Barclays.

"No decision was as hard as the one that I make now to stand down as chief executive."

He went on: "I know that each and every one of the people at Barclays works hard every day to serve our customers and clients."

Mr Diamond confirmed he would still appear before the Treasury Select Committee tomorrow to answer questions over the rate-fixing allegations.

Labour leader Ed Mili-band said: "This was necessary. It was clear he was not the man to lead the change Barclays needed."

The move was announced at 8am and an hour later, the bank's share price was up one per cent to 170p.

By David Burrows