The Libor Conspiracy: Were the Bank of England and Whitehall in on it? The email - an account of a conversation between the chief executive of Barclays, Bob Diamond, and the Deputy Governor of the Bank of England, Paul Tucker - appears to show Barclays was under the impression that manipulating rates was being sanctioned at the highest level. The email was released by Barclays ahead of today's high-profile showdown between Mr Diamond and MPs on the Treasury Select Committee. Mr Diamond is certain to be asked what advice he received from the Bank of England on the reporting of Barclays' Libor rates. Any suggestion that the manipulation was authorised by Mr Tucker, the Permanent Secretary at the Treasury Sir Nicholas Macpherson or government ministers would be highly damaging and increase pressure for a full public inquiry. The email came at the end of a day of dramatic developments in which it emerged that: Mr Diamond could be in line for a payment of up to £30m after announcing his immediate departure as head of the bank. Barclays was said to be attempting to get its former chief executive to waive up to £20m in bonus payments. Mr Diamond's resignation was triggered by a call from the Governor of the Bank of England Sir Mervyn King to Barclays' chairman, Sir Marcus Agius. Some reports suggested Sir Mervyn told Barclays that unless Mr Diamond went, the BoE might not stand as the backer of last resort. But it was the release of an internal Barclays email which could prove the most significant development. The email, dated 30 October 2008, was from Mr Diamond, then head of Barclays Capital, to John Varley, Barclays' chief executive, and copied in to Jerry del Missier, then co-head of the investment bank. In it he details a phone conversation with Mr Tucker who was concerned at Barclays' high reported Libor borrowing costs. Mr Diamond said the Deputy Governor told him he had received calls "from a number of senior figures within Whitehall" to question "why Barclays was always toward the top end of the Libor pricing." Mr Diamond said he told him that the Treasury should be told it was because other banks were under-reporting their own borrowing costs. He said the response was, "Oh, that would be worse." In the most damaging section of the email Mr Diamond says he was told the calls from the Treasury were "senior," before appearing to give a strong hint that Barclays should also under-report its borrowing rates. He said Mr Tucker told him: "it did not always need to be the case that we appeared as high as we have recently." But in its submission to the select committee Barclays claimed that was not what Mr Diamond meant by the email. "Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier," Barclays said. Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier. However, Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the submitters. In a hastily convened conference call yesterday afternoon Barclays' chairman Marcus Agius refused to provide any explanation for the apparent contradictions within the bank's submission. "There is a hearing of the Treasury Select Committee tomorrow when this will be addressed," he said. Despite repeated questions Mr Agius refused to explain further. The Tories are hoping to embroil the shadow Chancellor Ed Balls in the scandal. Although he was not a Treasury minister at the time he was close to Gordon Brown. Mr Balls said he knew nothing about senior figures in Whitehall applying pressure over Barclays' Libor pricing. Bob Diamond's own note of a phone call with Paul Tucker, Bank of England Deputy Governor, 29 October 2008 Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing... I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transactions, his response "oh, that would be worse..." I noted that we continued to see others in the market posting rates at levels that were not representative of where they would actually undertake business... Shock in the City: The day banks were called to account 7.40am Barclays announces the resignation of chief executive Bob Diamond with immediate effect. Chairman Marcus Agius, who announced his own resignation on Monday, returns to the role and will lead the bank until a replacement is found. 8.01am Barclays' shares fall in early morning trading, dropping around 3 per cent to 163p. 8.18am The Chancellor, George Osborne, who was appearing on Radio 4's Today programme, says he welcomes Diamond's resignation, calling it "the first step towards the new age of responsibility we need to see." 8.40am Labour leader Ed Miliband says that Diamond's resignation was "necessary and right." 8.48am Barclays' shares recover, up 1 per cent to 170p. 11.59am BBC business editor Robert Peston tweets that Governor of Bank of England Mervyn King and the chair of the FSA told Barclays they would be, in Peston's words, "happy for Diamond to go." 2.45pm Barclays' chief operating officer Jerry del Missier resigns. 3.22pm Barclays publishes its submission to the Treasury Select Committee, chaired by Andrew Tyrie, ahead of today's hearing with Bob Diamond. It contains an email from Diamond, detailing a phone call between himself and the deputy governor of the Bank of England, Paul Tucker, in October 2008, in which Tucker appears to tell Diamond that Barclays need not set the Libor rate "as high as we have recently." The email refers to "senior figures within Whitehall" questioning Barclays setting of the Libor rate. 3.25pm Agius says Diamond and del Missier have put "the future of the bank ahead of their careers." 3.40pm Diamond's daughter, Nell, defends her father on Twitter, writing: "No one in the world I admire more than my dad. 16yrs building Barclays. Shame to see the mistakes of few tarnish the hard work of so many. 4.56pm Barclays shares close down 1.35 per cent at 168.4p.