BRITISH banking giant Barclays today saw its credit rating outlook downgraded to negative to reflect concerns over the impact of Bob Diamond's shock resignation.

Ratings agency Moody’s said the departure of Mr Diamond, as well as chairman Marcus Agius and chief operating officer Jerry del Missier, in the wake of the rate-rigging scandal could lead to the break up of its powerhouse investment arm.

The cut - from stable to negative - comes ahead of a vote among MPs to decide whether Parliament or a judge should stage an investigation into the Libor-fixing affair, while George Osborne has accused Labour of being "clearly involved" in it.

Ex-Barclays chief executive Mr Diamond yesterday admitted feeling "physically ill" when he discovered traders had fiddled the key rate but denied he was "personally culpable" for their actions.