An investigation into the Scottish banking sector has been under way for some time and will now be extended, prosecutors confirmed today after Barclays involvement in the banking scandal.
The Crown Office in Scotland said the Serious and Organised Crime Division is leading the probe.
Prosecutors said they decided to confirm the investigation was ongoing in light of the "degree of public concern" about recently-reported issues in the banking sector.
The directors of failed banks could be prevented from holding senior positions at financial institutions again in the future under proposals announced by the Treasury today.
The Government is also launching a consultation on the possibility of introducing a new criminal offence covering serious misconduct in bank management.
The proposals follow the Financial Services Authority's report into the failure of Royal Bank of Scotland, which concluded that the poor judgment and management errors of directors and senior managers was partly to blame for the bank's failure.
It is quite possible crimes were committed in the Libor rate-rigging scandal, Justice Secretary Kenneth Clarke said today.
Speaking in the Commons, Mr Clarke said: "I can only say from reading what I have read of these cases, it seems to me quite plainly that a matter of possible crime is involved in what has been described."
"I think we can all be reassured to know that it is being inquired in to and that anybody guilty of a crime must be brought to justice."
A senior Labour source said today that the Government is "in retreat" over the banking inquiry. The source said:
Forty-eight hours ago we did not have an inquiry, 24 hours ago we did not have a vote. Now David Cameron must go one step further and have an independent, judge-led inquiry.
Answering questions from Labour MP Chris Bryant at the Commons today, leader of the House of Commons Sir George Young laid out the plans for Thursday.
Mr Young said: "[We will] put two alternatives before the House, the inquiry that has been proposed by the opposition and the joint committee that has been proposed by the Government."
Liberal Democrat deputy leader Simon Hughes said today that a "judge-led" inquiry into the banking sector should "not be the priority". Mr Hughes said:
The failures of the banking system and specifically the attempt to fix interest rates comes after a successful investigation by the regulator.
There is already banking legislation in Parliament. This will make the regulation of the financial sector much tougher and is the result of Liberal Democrat campaigning from Vince Cable and (MP) Steven Williams in the last parliament.
A parliamentary committee could do a lot to make the legislation even tougher and better.
MPs will vote on Thursday on proposals to set up a full judge-led inquiry into the bank rate-rigging scandal, a No 10 source has said.
I understand that Andrew Tyrie, chair of the Treasury Committee, has made clear he wouldn't chair the inquiry if it went to a Parliament vote so I am not sure how that will sit with a vote on Thursday.
Prepare for an attempted Treasury Select Committee takeover of the inquiry. There is a growing sense that they feel they are best placed to do it, starting with Barclays boss Bob Diamond, who resigned today with immediate effect.
The shadow chancellor Ed Balls has attacked the Government's handling of the banking scandal but said he not given up hope of persuading ministers to accept a judicial inquiry.
He told Sky News's Boulton & Co:
"The way the Government has handled this since yesterday in a totally partisan way is, to be honest, undermining trust,"
"It would be tough but we should appear before these things. But that is true for all of us politicians, previous chancellors and shadow chancellors, it is the only way for the public to see it is done properly."
He also acknowledged that he could face some difficult questions if such an inquiry went ahead.
It would be tough but we should appear before these things. But that is true for all of us politicians, previous chancellors and shadow chancellors, it is the only way for the public to see it is done properly.
A cross-party Parliamentary inquiry into the banking sector has been thrown into doubt after Labour signaled it may not support such a move.
Tory MP Andrew Tyrie has said that he would not be prepared to chair the investigation unless there is genuine, cross-party support.
Labour intends to put its demands for a judge-led inquiry to a vote in the House of Lords later today and in the Commons later in the week.