Libor scandal: Bob Diamond lost support of FSA after rate-rigging emerged SIR Mervyn King, the head of the Bank of England, told Bob Diamond he no longer had support from regulators before the Barclays boss quit, MPs were told today. Bob Diamond to receive £1.5m - £2m Marcus Agius gave evidence to Treasury Select Committee David Cameron says Chancellor does not need to apologise to Ed Balls The revelation comes on the day Barclays said Mr Diamond has waived his entitlement to a potential £20 million in deferred share bonuses. But he will still walk away with about £2 million. Barclays chairman Marcus Agius appeared in front of the Treasury Select Committee today. He said the Financial Services Authority (FSA) changed its stance on Mr Diamond's position at the helm in the days after the rate-rigging scandal broke. He also admitted that Barclays" relationship with the regulator was "strained." However, he denied allegations they were in "a pretty desperate state." MPs were told Mr Diamond had decided to voluntarily forgo his multi-million pound bonus entitlements after he quit as chief executive last week as public anger mounted. Mr Diamond, whose severance package amounts to a year's salary and pension cash contribution, said he hoped the agreement "will help close this chapter and allow Barclays to move forward and prosper" after the bank was fined £290 million for attempting to fix the interbank borrowing rate Libor. Prime Minister David Cameron's official spokesman said: "I think the decision to forgo the bonus is a sign that they understand public concerns and that they understand that there is a need for a change in the culture of banks." Mr Agius - who also resigned, but will remain at the bank while a successor to Mr Diamond is found - revealed that Sir Mervyn called him into an emergency meeting to explain "in no uncertain terms" that the FSA believed Mr Diamond needed to go. "The public outcry had been far greater than thought," said Mr Agius. He said it was clear from the meeting with Sir Mervyn that the FSA thought Mr Agius's resignation was inadequate and that further action was necessary. But he stressed the FSA had not given the impression Mr Diamond should resign when the bank's Libor fixing settlement was first announced the previous week. The cross-party committee of MPs painted a picture of a chequered history between the FSA and Barclays leading up to the rate rigging scandal. The committee cited a letter from the FSA flagging the regulator's concerns about "a pattern of behaviour" in which Barclays sought to gain advantage through the use of complex structures which are "at the aggressive end of interpretation of the relevant rules and regulations." But Mr Agius said: "When any bank deals with its regulator, it has to deal with complex matters, it's not like a speed camera catching you for going more than 30mph. Quite often, the points are open for interpretation and debate and we have chosen to debate with the regulators. Mr Agius was the first executive to quit when the scandal emerged earlier this month, but his resignation was not enough to prevent Mr Diamond from being forced out. In a fierce exchange with the committee, one MP said: "A great British bank has been dragged through the mud - are you ashamed?" Mr Agius replied: "I regret deeply what's happened to Barclays. I'm truly sorry. He said the board "welcomed" the move by Mr Diamond to forgo his long-term bonus incentives. Today's announcement follows what are said to have been intense negotiations over Mr Diamond's leaving deal. It is thought Barclays remains in talks with Mr Diamond's right-hand man, chief operating officer Jerry del Missier, over his pay-off. Mr Diamond said in a statement: "For the past 16 years I've had the honour of working at Barclays. The wrongful actions of a relative few should not detract from the outstanding work that Barclays employees carry out each day on behalf of clients and customers around the world. Mr Diamond has a six-month notice period, but is getting a year's salary as a payoff because he is making himself available to Barclays. Mr Agius said the former chief executive was thought of highly by shareholders and clients. The board deeply regrets the circumstances that led to Bob resigning his positions at Barclays. "Despite having no personal culpability, he recognises more than anyone the negative attention that they have generated and has taken characteristically strong action to address that," he added. Meanwhile, the Prime Minister has backed the Chancellor after he suggested Labour ministers including Ed Balls were involved in the Barclays rate-fixing scandal. The PM's spokesman said today that Cameron does not see any need for Osborne to apologise for his comments. Labour has called for the Chancellor to say sorry after Bank of England deputy governor Paul Tucker refuted claims any minister or Whitehall official encouraged him to "lean on" Barclays to lower its submissions to the crucial Libor index. Conservative MP Andrea Leadsom, a member of the Commons Treasury Committee which heard Mr Tucker's denial, said Mr Osborne had clearly made a mistake and should now apologise. And Tory former chancellor Lord Lamont said Mr Osborne had "overplayed his hand." Lord Lamont told BBC2"s Daily Politics: "If there is an allegation Ed Balls was involved, it doesn't stand up. That is clear. Mr Cameron's official spokesman was asked at a regular media briefing this morning whether the Prime Minister agreed it was time for the Chancellor to say sorry. The spokesman said: "The Treasury has been making the position clear that he won't. He (Mr Cameron) agrees with the Treasury. Speaking to The Spectator magazine last week, Mr Osborne said that figures around Labour's former PM Gordon Brown were "clearly involved" in efforts to persuade Barclays to understate the interest rates it was being charged in 2008, at the height of the financial crisis. The claim sparked a furious clash in the House of Commons, where Mr Balls said he had been falsely accused of such behaviour "not on the basis of evidence but purely in the hope of political advantage." The Chancellor told the Spectator that members of Mr Brown's inner circle had "questions to answer," adding: "My opposite number was City minister for part of this period and Gordon Brown's right-hand man for all of it. So he has questions to answer as well. That's Ed Balls, by the way.