Barclays Bank has escaped nationalisation, saying that it can raise sufficient capital from its existing shareholders to meet the Government's demands.

Yet the bank conceded yesterday that if it fails to raise the £7.5 billion it needs to bring its capital up the level required by the Treasury, it could face much tougher terms if it tries to access the bailout fund later.

Barclays said that it had already agreed in principle an investment of £1 billion from an existing shareholder. The bank declined to say which shareholder had agreed to invest, but it is believed to be a sovereign wealth fund from Qatar or Singapore or Sumitomo Mitsui, the Japanese bank.

John Varley, the chief executive of Barclays, said that the bank was much better placed than its British rivals, who will have to operate under the restrictions of their part-nationalisation.

“We made our decision because of the confidence we have in our capital and in our support from shareholders,” he said. “That view is reciprocated by the UK authorities. What we wanted to protect is our right to self-determination.”

Mr Varley added that officials from the Financial Services Authority and the Treasury had spent much of the weekend stress-testing the bank's stability and capital adequacy. “They want to put all the UK banks in a situation where they can withstand a significant downdraft in the economy,” he said.

The bank has set a new level of 11 per cent for Tier 1 capital, but Mr Varley conceded that the new capitalisation was not permanent and could be reduced in future if economic conditions improved.

Barclays intends to raise the money though a combination of share issues and cost-cutting.

It said yesterday that it would issue £3billion of new preference shares by the end of the year and push ahead with a £600 million issue of new ordinary shares to fund its acquisition of Lehman Brothers' North American business. It will issue a further £3 billion of ordinary shares by March 31. Shares in the bank closed just under 4 per cent up at 215p.

Barclays

— Barclays to sidestep Government’s capital injection, raising £6.6 billion from existing investors

— Bank will issue £3 billion of preference shares by year-end, plus £600 million of ordinary shares

— A further £3 billion to be raised “as soon as practicable”

— Barclays able to tap government guarantees, despite shunning funding

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