Barclays admitted today that it had walked away from a deal with Lehman Brothers, the Wall Street bank that today filed for Chapter 11 bankruptcy, after the UK lender was unable to secure an agreement that was in the best interests of its shareholders.

The bank postponed an investor seminar that it had scheduled for today in the wake of the US turmoil.

Bob Diamond, president of Barclays, had been a chief player in rescue talks throughout the weekend, as Lehman Brothers teetered on the brink of collapse.

Barclays said this morning: "We confirm that Barclays considered a combination with Lehman Brothers and did not proceed because it was not possible to conclude a transaction in the best interests of Barclays' shareholders".

The bank is thought to have been unable to convince the US Treasury to offer financial backing that would have allowed Lehman to continue trading while a deal was agreed.

The US authorities offered extensive credit facilities to JPMorgan Chase when it bailed out Bear Stearns in February, at a cost of $29 billion (£16 billion).

Barclays is also likely to have been put off by the length of time that it would have taken to secure the approval of its shareholders.

The US Treasury and Federal Reserve are increasingly unwilling to bankroll failing banks after helping to bail out Bear Stearns and, most recently, backing Freddie Mac and Fannie Mae, the US mortgage debt giants, with $200 billion worth of taxpayers' money.

The authorities were unable to convince any of Lehman's Wall Street counterparts to join a rescue deal.

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