Deutsche Bank, UBS, HSBC, Citigroup, J.P. Morgan and ICAP are reportedly also in line for a probe.
The Daily Telegraph reported that UBS has agreed to co-operate in the Financial Services Authority investigation granting it partial immunity.
Lloyds has suspended two derivatives traders as a result of the investigation.
Yesterday Barclays was slapped with a £60m fine from the FSA and a £230m fine by US regulator the Securities and Exchange Commission after an investigation revealed traders were in cahoots to fix LIBOR and EURIBOR interbank lending rates.
Japanese, Swiss, Asian and Canadian regulators are also investigating the allegations and all banks involved could face further fines.
The LIBOR investigation began in 2008 but rates may have been manipulated as far back as 2005.
Barclays chief executive Bob Diamond and three other senior executives gave up their bonuses for the year after admitting the behaviour "fell well short of standards".
