Britain's parliament will launch a probe into the interest rate rigging scandal that has claimed the job of Barclays chairman Marcus Agius, Prime Minister David Cameron said today.

The news came hours after Agius resigned over revelations that Barclays had lied about the interest rates other banks were charging it for loans.

Britain's Serious Fraud Office said today it is considering whether it was "both appropriate and possible to bring criminal prosecutions" over the issue.

It added that it hoped to come to a conclusion within a month. 

Cameron said people "want to see bankers who acted improperly punished, and they want to know we will learn the broader lessons of what happened in this particular scandal".

"I want to establish a full parliamentary inquiry involving both houses, chaired by the chairman of the Commons Treasury Select Committee," he told parliament. "This committee will be able to take evidence under oath," he added.

"It will have full access to papers, officials and ministers, including ministers and special advisers from the last government, and it will be given, by the government, all of the resources it needs to do its job properly," he said.

Cameron said Britain also needed to raise taxes on banks and introduce "the toughest and most transparent rules on pay and bonuses of any major financial centre in the world".

The inquiry would "be able to start immediately", the prime minister added. "It will get to the truth quickly so we can make sure this never happens again."

The manipulation of interest rates, which may turn out to implicate some other international banks, concerned the Libor and Euribor rates which play a key role on global markets, affecting what banks, businesses and individuals pay to borrow.

It emerged yesterday that Royal Bank of Scotland had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice may have been widespread.

Earlier, Barclays chairman Marcus Agius resigned over interest rate rigging as the bank faced possible criminal prosecution in a scandal that has sullied London's image as a financial centre.

The beleaguered bank announced his departure, and promised an independent audit, amid questions about the future of its chief executive Bob Diamond and generally about morality in London's financial sector.

Barclays said that Agius, who has chaired the bank for six years, would remain in his post until a successor was found. But markets were also focused on whether Diamond, a high-profile and highly paid banker, would keep his job amid widespread calls for him to go.

"I am disappointed because many of these behaviours happened on my watch. It is my responsibility to make sure that it cannot happen again," Diamond told staff in a memo today.

Markets were also wondering whether the latest banking scandal would result in a radical shake-up of the way in which business is conducted across the City, amid pressure from high up the political ladder.

Barclays chairman sorry for letting down shareholders

"I am truly sorry that our customers, clients, employees and shareholders have been let down," Agius said in a company statement, less than a week after the bank was fined by British and US regulators for alleged rigging of inter-bank rates.

"Last week's events - evidencing as they do unacceptable standards of behaviour within the bank - have dealt a devastating blow to Barclays' reputation,'' Agius said. "As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside," he added in a statement.

Barclays said it would launch an independent audit that would "undertake a root and branch review of all of the past practices that have been revealed as flawed since the credit crisis started" about five years ago. The bank insisted that it would establish "a zero tolerance policy for any actions that harm the reputation of the bank."

Britain's Business Secretary Vince Cable yesterday backed calls for a criminal investigation into bankers involved in the scandal. That was after Prime Minister David Cameron said he intended to bring Diamond and others at the bank to account.

American national Diamond, who was in charge of Barclays' investment arm at the time of the suspected manipulation, will face questions from British lawmakers on Wednesday. The SFO said it had been working closely with the Financial Services Authority watchdog during the latter's investigation into Libor rate manipulation.

"Now that the investigation into the issue of regulatory misbehaviour has concluded, the SFO are considering whether it is both appropriate and possible to bring criminal prosecutions," the independent government department said in a statement.

Pressure on Barclays has risen after British and US authorities last week together fined the bank £290m sterling amid international probes into several lenders over alleged rigging of overnight rates. Barclays is the first major financial institution to settle following investigations on both sides of the Atlantic.

Meanwhile, RBS chief executive Stephen Hester and Diamond have both said they would forgo their bonuses for 2012 owing to the recent scandals.