The bank, which has previously resisted government help in the credit crunch, signalled that it is in talks with the Treasury over participating in a taxpayer-underwritten insurance plan.
Barclays seems likely to agree to enter the government's toxic asset insurance scheme and sell off its iShares fund management unit, as it works to strengthen its balance sheet.
Reports over the weekend had suggested that the bank could expect around £5 billion from the sale. Barclays, which has thus far opted out of participating in government bailouts, also secured around £5 billion from Middle Eastern investors last year.
However, a statement from the current account provider confirmed this morning that talks were ongoing with the Treasury and the Financial Services Authority (FSA) over Barclays entering into the Asset Protection Scheme, which works through the taxpayer underwriting further losses on hard-to-value assets. The Lloyds Group and RBS, who, unlike Barclays, have previously accepted government bailouts and have been part-nationalised as a consequence, have already ringfenced their toxic assets in this way.
Credit conditions and the real economy have continued to worsen over recent months, putting banks under more and more pressure to accept government help.
"Barclays notes press comment regarding the potential disposal of iShares and confirms that it has held discussions with a number of potentially interested parties… No decision regarding the disposal of any business has been taken," the bank said in the statement. "Barclays also confirms that it is in dialogue with HM Treasury and FSA regarding its potential participation in the government's Asset Protection Scheme."
Investors reacted positively to the news, sending Barclays shares up by over 20 percent on the FTSE 100 stock exchange this morning.
