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Barclays' shares in freefall over embattled chief

The Barclays boss Bob Diamond is under intense pressure to resign after David Cameron and Ed Milliband said he had "serious questions to answer" in wake of the Libor interest-rate fixing scandal.

Mr Diamond has said he would not take his multimillion-pound bonus this year after the bank was caught taking part in a conspiracy to manipulate key borrowing rates for years. The exposure of the scandal will cost Barclays £290m in fines.

But the leaders of both main political parties have piled pressure on Mr Diamond, as shares in the bank appeared to be in freefall. By lunchtime yesterday the stock was down by more than 15%.

Speaking during a visit to West Yorkshire, Mr Cameron said that the whole management team at Barclays had "some serious questions to answer".

"Who was responsible? Who was going to take responsibility? How are they being held accountable? These are issues they need to determine and determine quite rapidly," he said.

In the Commons, George Osborne said the Financial Services Authority (FSA) was liaising with the Serious Fraud Office on any potential prosecutions but admitted "fixing" the Libor borrowing rate was not a criminal offence in Britain. It is, however, possible that bankers operating in Britain could be prosecuted abroad.

"It is clear what happened in Barclays and potentially other banks was completely unacceptable, was symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees," said Mr Osborne.

The Labour leader Ed Miliband called for criminal prosecutions. "When ordinary people break the law they face charges, prosecution and punishment. We need to know who knew what when, and criminal prosecutions should follow against those who broke the law," he said.

Mr Diamond, whose £28.3m pay package last year caused outcry, said that he and three lieutenants would take "collective responsibility" for the scandal and would not ask for a bonus for 2012.