The bill for mis-sold payment protection insurance  at Barclays soared to £2 billion sterling today as claims against the banking giant continue to pile up.

The embattled lender unveiled a further £700m hit following provisions of £1 billion in 2011 and £300m in the first quarter of 2012.

The higher charge comes after the Financial Ombudsman Service warned that PPI complaints are on course to more than double the 165,000 that it had anticipated this year.

Barclays had paid out £1.2 billion in compensation by the end of September, leaving £800m to cover expected future redress for customers.

PPI policies were typically taken out alongside a personal loan or mortgage to cover repayments if customers fell ill or lost jobs, but they were often sold to people who would never have been able to claim.

British banks have now set aside over £10 billion to compensate customers wrongly sold policies, now one of the worst consumer financial scandals in British history.

Lloyds Banking Group has set aside £4.3 billion for PPI mis-selling, and Barclays has now provisioned the second highest amount. RBS has set aside £1.2 billion , HSBC £1.1 billion and Santander UK £538m.

Barclays made the disclosure ahead of its third-quarter results due on the last day of October. It said adjusted profits in the three-month period, which exclude the PPI provision, should be "broadly in line" with analysts' forecasts of £1.7 billion.