Agius admitted to unacceptable standards of behaviour and apologised to staff, customers and shareholders, amid the fallout from the £290 million ($453 million) settlement of an interest rate manipulation probe.

Barclays said a search for a successor both from within the existing board members and from outside will be led by Sir John Sunderland, starting today. Agius will remain in post until an orderly succession is assured and Sir Michael Rake has been appointed deputy chairman.

"This has been a period of unprecedented stress and turmoil for the banking industry in particular and for the wider world economy in general. Barclays has been well served by an excellent executive team - led, first by John Varley, and now by Bob Diamond – which has worked constructively with a strong and supportive board of directors. Barclays has remained resilient throughout the crisis, and has worked hard to ensure that today it is a strong, well capitalised and profitable business," Agius said in a statement today.

"But last week’s events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays reputation. As chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside," he said.

Agius will be the most senior head to roll so far in the scandal that made headlines last Tuesday. It recently came to light that four Royal Bank of Scotland traders had been dismissed over their role in LIBOR-fixing, at the end of last year.

Agius has been in the role of chairman since 2007. However the bank is not facing the wrath of the regulators and politicians alone. Probes are also underway at Deutsche Bank, RBS, JP Morgan, HSBC, Citigroup and UBS, according to reports.  

Switzerland’s UBS has said it has been granted partial immunity by certain regulators, including the Justice Department, in return for cooperating with the probe, said the Wall Street Journal.

Meanwhile, as reported elsewhere by this publication, Barclays’ chief executive Robert Diamond has issued a mea culpa by last week agreeing to forfeit his multi-million pound annual bonus.