Former Chancellor Alistair Darling told Channel 4 News tonight that it would have been "indefensible" for anyone in his Department to call for the manipulation of Libor rates.
The Government and Labour clash over the scale of inquiry into the banking scandal. Labour want a full, independent one.
The new government inquiry will look both into the culture of banking and into the setting of Libor rates
The Chancellor's team says his announcement to the Commons will "shoot Labour's fox."