Barclays bank chairman Marcus Agius resigns

The chairman of Barclays Plc is set to step down as the UK interest rate rigging scandal takes its first major victim and threatens to widen to other banks.

Marcus Agius, chairman at Barclays for more than five years, will announce on Monday that he is to leave his post in the face of public and political fury over the bank's efforts to distort the rate at which

In his statement, Agius said: "The buck stops with me."

Last week Barclays was fined £290m for attempting to manipulate the Libor inter-bank lending rate.

Barclays' chief executive Bob Diamond will appear before MPs on the Treasury Committee on Wednesday. He is due to answer their questions on Thursday.

Barclays said Agius would remain in his post until "an orderly succession is assured".

Mike Rake, chairman of BT, is favourite to replace the outgoing chairman, Sky News reported.

The broadcaster also claimed that the Barclays board was set to commission an independent inquiry into events.

Pressure has built on CEO Bob Diamond and Agius to quit following a multi-million fine for Barclays by British and US regulators last week for submitting inaccurate submissions on the Libor interest rate.

Barclays has admitted that some of its traders attempted to manipulate the setting of the London interbank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about $350 trillion of derivatives and other financial products.

It emerged earlier Sunday that The Royal Bank of Scotland had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice was widespread.

David Cameron, British prime minister, on Friday reiterated his intention to bring Diamond and others at the bank to account.

"I think he and frankly the whole management team have got some very serious questions to answer," the British premier said.

"How many people were engaged in this activity, who were they, who was managing them, to whom were they accountable, how much did the management of this company know about what was happening?"

British lawmakers are due to question Diamond about the affair on Wednesday.

Adair Turner, head of the regulating Financial Services Authority (FSA), earlier explained to the BBC that the fine was the toughest penalty available and urged for a tightening in the law.

Extracts from an FSA report released on Wednesday showed that Barclays staff mistakenly believed the Bank of England had encouraged them to manipulate the rate, according to the Press Association, Britain's domestic news agency.

The scandal is a fresh blow to Britain's embattled banking sector following massive bailouts paid for by taxpayers.

Cameron also vowed not to let possible fines end up being used by the bank to reduce its annual tax bill.

"These fines should not be reducing the bills of banks they should be reducing the bills of hard-pressed taxpayers and that is how it is going to be," he said.