Paul Tucker told MPs that Barclays’ abuse of the Libor system may be only one part of the banks’ dishonesty over crucial financial information, suggesting that other markets should now be investigated.

An official inquiry into Libor – which helps determine interest rates for householders and businesses – should be broadened to include several over markets where banks are trusted to report their own data, he said.

Mr Tucker’s evidence to the Treasury Select Committee also reignited the political row over the Libor scandal as he insisted that members of the last Labour government had not “absolutely not” put pressure on him to reduce Libor.

George Osborne, the Chancellor, has said that that the last government was “clearly involved” in the banks’ dishonest under-stating of the interest rates they were paying to borrow on money markets.

Labour last night demanded Mr Osborne withdraw his claims, but Treasury sources insisted that question remain about Labour’s direct dealings with dishonest banks during the 2007-08 financial crisis.

Barclays has been fined almost £300 million for deliberately lying about the rates it was paying during the financial crisis, in order to downplay the financial pressure it was under.

Other banks are also being investigated for distorting Libor, which is calculated on major banks’ own reports of their borrowing costs.

Mr Tucker said he could not be sure that abuse of the Libor system is not continuing to this day, telling the committee: “I can’t be confident of anything after learning of this cesspit.”

The Libor scandal could be repeated in a number of other “self-certifying” markets where prices are determined, he said.

“Self-certification is clearly open to abuse, so this could occur elsewhere,” he said.

A Financial Services Authority inquiry into Libor should be extended to other self-certifying markets, he said. The Treasury said last night that the review, led by Martin Wheatley, was free to examine markets other than Libor…..”

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