Ex-Barclays Boss Bob Diamond Under Pressure To Hand £2m Payoff To Charity

The £2m is made up of 12 months' salary, pension and benefits and is payable in a lump sum in July 2013. It is double the six months' pay that he was technically entitled to, but the bank has handed him more to ensure he is available to tackle any issues in the coming months.

Diamond said he hoped his decision "will help close this chapter".

He would also be provided with office facilities, the cost of which is included in the negotiated sum. He will no longer be provided with the "tax equalisation" treatment that forced the bank to hand over £5.7m to cover his tax bills last year.

But John Mann, a member of the Treasury select committee, called for the £2m to be given to the charity Shelter to show "true contrition". "These are sums that are beyond the comprehension of most people," said Mann.

David Hillman of the Robin Hood Tax campaign said: "It would take the average Briton a lifetime to earn the same amount."

David Cameron's spokesman was more conciliatory. "I think the decision to forgo the bonus is a sign that they understand public concerns and that they understand that there is a need for a change in the culture of banks," he said.

Diamond has taken home around £100m since 2006 when his pay was first disclosed after he joined the board of the bank, which he had joined in 1997 to turn around the troubled investment bank.

Diamond said in a statement: "The wrongful actions of a relative few should not detract from the outstanding work that Barclays employees carry out each day on behalf of clients and customers around the world. It is my hope that my decision to step down and [the] agreement on my remuneration will help close this chapter and allow Barclays to move forward and prosper."

This article was written by Jill Treanor, City editor, for The Guardian on Tuesday 10th July 2012 18.38 Europe/London

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