The American banker, who once said the time for blaming the banks was over, was grilled by Treasury Select Committee MPs today and accused of incompetence.
He was also forced to apologise saying: “I’m sorry, disappointed and angry.”
After suggestions that Barclays had written evidence implicating deputy Bank of England governor Paul Tucker in the rate fixing scandal, Diamond said this afternoon that he did not view his conversation with Tucker as an instruction to change its LIBOR submissions.
Yesterday Diamond released an internal email detailing a phone call with Tucker who described concerns among "senior figures within Whitehall" about why Barclays was setting its LIBOR rate at the "top end".
Barclays LIBOR submissions fell days after this conversation.
But Diamond defended the drop this afternoon claiming the rate came down because of a successful capital raising in the Middle East reducing the bank’s funding costs.
However he admitted that Barclays' chief operating officer Jerry del Missier, who also resigned on Tuesday, had "misunderstood" Tucker’s comments and consequently ordered traders to lower Barclays' LIBOR rates.
He claimed the Financial Services Authority had investigated del Messier's actions and believed they were the result of this misunderstanding and that consequently the regulator did not plan further action against him.
Diamond also said he felt “physically sick” after reading emails between traders discussing how to rig LIBOR rates.
The former CEO confirmed that those involved would be subjected to criminal investigations – something that was unclear last week when the scandal first broke.
Diamond also indicated he would fight for his £22m payoff after resigning from the bank yesterday.
In another twist Paul Tucker has asked to give evidence to the Treasury Select Committee in order to give his side of the story.
A statement from the Bank said: "Mr Tucker is keen to give evidence to the committee in order to clarify the position with regard to the events involving the Bank of England, including the telephone conversation with Bob Diamond on 29 October 2008.”
Barclays was fined a record £290m last week for attempting to manipulate the interbank lending rate, LIBOR, between 2005 and 2009.
Around 15 other lenders in the UK and elsewhere in the world are thought to be also under investigation over the LIBOR rigging scandal.
