During his five-year reign at Barclays, the man who has been described as the "cleverest boss in Britain", a wonderkid with a "helicopter intellect" had steered the bank through a major restructuring.

His dramatic departure was couched in the most diplomatic PR terms, as nothing more than "the end of a marriage."

Sir Peter Middleton, who will replace Mr Taylor temporarily, denied reports of any rifts over any future merger of Barclays with one of its rivals.

But almost in the same breath, Sir Peter announced that the bank would be reviewing the future of Barclays Capital operation.

Behind the diplomatic front, one could hear the firing of board-room bullets.

Meteoric rise

From a modest background in Burnley, Lancashire, Taylor then won a scholarship to Eton.

Next stop was Balliol College, Oxford, after which he became a journalist at the Financial Times.

He then ventured into business, first becoming chief executive of Courtaulds' textiles business, and then moving to Barclays as chief executive

At 41, he was the bank's youngest-ever boss, and the first outsider to occupy that position.

Now his five-year reign has come to a dramatic end.

Merger failure

The failure of talks with Derek Wandless was a blow

So when did Mr Taylor's problems begin?

In the summer of 1997, Mr Taylor to try and persuade Derek Wanless, chief executive of NatWest group, that the two banks should merge.

Martin Taylor believed that without such a merger, the UK would lack the muscle to compete with the global banking giants in the USA and Continental Europe.

Mr Wanless rejected the offer in the face of fierce opposition from the unions, who feared massive job losses.

Since then, Barclays shares have underperformed NatWest's by 22%.

And Barclays' attempt fo find another merger partner have also floundered.

After the failure of the talks, Mr Taylor planned the break up of BZW, the investment-banking arm, selling its equity business and retaining fixed income and foreign exchange as a new company, Barclays Capital.

He said that it was no longer profitable, and the capital raised by the sale could be put to better use.

The plan prompted the swift departure of Bill Harrison, the man whom Mr Taylor had recruited less than a year before to head BZW.

The sale of BZW, which became a chaotic process, was an enormous gamble for Martin Taylor and earned him the first real criticism since his arrival.

Buyers were not forthcoming and in the end, Barclays lost £688m from selling BZW in bits.

More losses

The sale led many to believe that Barclays was leaving investment-banking risk behind - one reason why the Russian losses came as such a nasty suprise.

As one dealer said recently:- "If Barclays Capital was meant to be a client-serving business, what was it doing speculating on the Russian bond market."

Barclays' financial problems were compounded two months ago when Mr Taylor revealed that exposure on the Russian bond markets had cost Barclays £325m.

The loss came as a shock - even to the upper echelons.

Hedge-fund collapse

It then emerged that Barclays' role in the rescue of the collapsing hedgefund Long-Term Capital Management (LTCM) cost a further £178.5m.

Despite the reassurances and charm offensive, Barclays shares plummeted.

Between July and September they fell by more than half since peaking at £19.96 in July.

The Board was known to be dissatisfied with the group's performance, particularly with the extent of trading losses.

Robin Hood

While Barclay's troubles at home were mounting, Mr Taylor spent the winter helping the government design of its the key policies for reforming the welfare state.

He is one of Tony Blair's closest allies in the business world and headed a government task force on tax on reforming national insurance.

He produced a report which set to alleviate taxes on the poor - one of the few redistributive tax measures which Labour has adopted.

Now, maybe the pressure on Barclays to look for a partner will intensify.

Iain MacLean, assistant general manager of UNiFI, the union representing Barclays staff said "Barclays failed to put together a constructive merger for the group."