Bob Diamond, the boss of Barclays has resigned from the embattled bank.

The chancellor, George Osborne, said his sudden resignation was “the right decision for Barclays – and for the country”.

“I think Bob Diamond’s resignation is the first step towards the new age of responsibility we need to see,” he added.

The bank’s chairman, Marcus Agius, originally quit only to be, temporarily, reinstated once Diamond had departed.

In a statement, Diamond said: “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.”

At his appearance before the Treasury select committee of MPs – chaired by the Conservative MP Andrew Tyrie whom the government has also appointed to lead a parliamentary inquiry into banking, Diamond will try to explain the bank’s actions for the period between 2005 and 2009, when the attempts to manipulate Libor took place.

In a submission by the bank to the Treasury select committee of MPs it said, “Senior management were not aware of traders attempting to manipulate Libor to help boost the bank’s profits. These explanations are in no way intended to excuse any of the events that occurred. These events should never have taken place, and Barclays deeply regrets that they did.”

The Libor rigging takes two phases – the first period from 2005 when traders were changing rates at the request of rivals and colleagues and the second during the banking crisis when a conversation between Paul Tucker, the Deputy Governor of the Bank of England and Diamond has now become a key focus.

Diamond has made clear that he did not believe Tucker had ordered him to lower the bank’s submission to Libor – to help avoid any false impression that the bank was in difficulty. However, Del Missier, a Canadian, who was promoted to chief operating officer a fortnight ago, was named as the top executive who instructed more junior staff to lower the bank’s submissions to the key benchmark rate, the London interbank offered rate (Libor), at the centre of the current scandal. Obviously he had interpreted Diamond’s remarks in a different way.

But the reference in the email to Whitehall sources asking Tucker why Barclays’ submissions were higher than those of its rivals sparked speculation about potential involvement from government ministers.

For much more on this story go to:

www.guardian.co.uk/business/2012/jul/03/bob-diamond-quits-barclays-libor-scandal