By Simon Miller

Barclays' Bob Diamond has resigned with immediate effect as chief executive and director of the bank.

With the fallout from its UK and US fines for Libor and Euribor manipulation still continuing, Diamond had come under increasing pressure to resign.

Despite resigning on Monday, Marcus Agius returns as full-time chairman and will lead the search for a new chief executive.

In a statement, Diamond said it had been a privilege to work for the bank and that his motivation had always been to do what he believed to be in the best interest of Barclays.

"The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen," he said.

Diamond continued: "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth. I know that each and every one of the people at Barclays works hard every day to serve our customers and clients. That is how we support economic growth and the communities in which we live and work."

Diamond is to attend the Treasury Select Committee on Wednesday and two inquiries has been set up by the government about the Libor case in particular and the general culture in UK banking.

Diamond joined Barclays from CS First Boston in 1996 and was previously president of Barclays PLC and chief executive of Corporate & investment Banking and Wealth Management where he is credited for turning the firm into a leading global investment bank.

The chancellor George Osborne welcomed the decision to resign saying it was "the right decision for Barclays" and the "right decision for the country".

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