THE board of Barclays is to decide on a new chief executive within the next few weeks, ending months of intense speculation.

A full meeting of the Barclays board, in Rome beginning on October 26, is expected to choose a successor to Matthew Barrett, chief executive of nearly four years.

The decision will not be easy. The two leading candidates, Bob Diamond, chief executive of Barclays Capital, and John Varley, group finance director, each have a degree of backing, but neither is thought to command the full support of the main Barclays board.

Mr Varley is viewed as a safe pair of hands and is one of the Barclays old guard. Mr Diamond, an American and one of the City’s highest paid investment bankers, is imbued with the performance-driven culture that has characterised Barclays under Barrett.

A decision to name one of two younger men as chief executive could trigger the departure of both main candidates and is not an option that is likely to appeal. The younger candidates are Bob Hoffman, Barclaycard chief executive, and David Roberts, chief executive of retail banking.

Mr Barrett had been widely expected to move up to chairman, replacing Sir Peter Middleton, but that appears increasingly unlikely.

A source said yesterday: “I do not think he has made his mind up yet. It is very finely balanced.”

Headhunters are thought to have been appointed to find a replacement for Sir Peter, but he can stay on by re-election. Lack of clarity over the succession issue is beginning to damage Barclays’ standing in the financial market.