Barclays 'mulls Treasury option'

Barclays' share price has fallen more than 50% since the start of the year

Barclays Bank may join the UK Treasury's asset insurance scheme, according to the Financial Times.

Banks have until 31 March to decide whether to join the scheme, which insures so-called "toxic loans".

The report came after the government took a 65% stake in Lloyds Banking Group and said it would insure £260bn of debt on the Lloyd's balance sheet.

Such a move would be a turnaround for Barclays, which has so far avoided seeking taxpayer money.

Submitted portfolios

Barclays has submitted three portfolios of assets worth less than £10bn to the Treasury for consideration, the Financial Times reported, adding that the Treasury plans to open discussions with the bank over the coming days.

Barclays shares surged 14% to 70p. The stock has dropped 54.6% since the start of the year.

Unlike Lloyds and the Royal Bank of Scotland, Barclays has stayed profitable amid the collapse of the financial markets. The bank reported profits before tax of £6.08bn ($9bn) for the full year of 2008.

Chairman Marcus Agius and Chief Executive John Varley published an open letter in December to reassure investors of the bank's financial strength, saying the bank was well funded and would not be seeking any financial support from the UK government.

Last October, Barclays has announced a proposal to raise up to £7.3bn to strengthen its balance sheet, mainly from the state investment funds and royal families of Qatar and Abu Dhabi.