BRITAIN's Business Secretary Vince Cable urged Barclays on Sunday to take a "strict view" on the severance package given to Robert Diamond, who resigned as CEO last week over the Libor rate-manipulation scandal.

"There isn't anything government can directly do about it, but in view of the shame that's already been heaped on Barclays bank, I'd be very, very surprised if the chairman of the board were to allow another outrage," Mr Cable told the BBC's Andrew Marr Show.

Barclays's board will ask Mr Diamond to give up at least part of a possible £17m package, the Sunday Telegraph reported on Sunday, without saying where it got the information. Discussions have taken place with the Association of British Insurers, the trade group that represents billions of pounds of pension funds' investments, the newspaper said.

The UK Serious Fraud Office said on Friday it was opening a criminal probe into the attempted manipulation of interbank offered rates that led to a record £290m fine against Barclays, the second-largest UK bank by assets.

The scandal has claimed the jobs of Mr Diamond, chairman Marcus Agius and chief operating officer Jerry del Missier.

Ed Balls, the top finance spokesman for the opposition Labour Party, said the amount Mr Diamond was potentially entitled to would be seen as "totally outrageous" and urged Barclays to "think really hard" about it.

"It is totally outrageous that somebody can stand aside because the board decides there's a problem and then get a payout which is off the scale of anything normal people will earn in their lifetimes," Mr Balls told the Andrew Marr Show. "How can that be?"

In an interview with the Mail on Sunday newspaper, Labour leader Ed Miliband attacked the estimated £120m Mr Diamond had made since joining the Barclays board in 2005 as "totally out of whack" and called for retail banks to sell branches to newcomers.

Mr Miliband will say in a speech on Monday that the Libor scandal reinforces the need for more competition in the banking industry. The big five banks should become seven, with private "challenger banks" buying as many as 1000 existing branches, he will say.

Bloomberg