At a tense meeting on Thursday night some board members argued that given his refusal to stay on to give Barclays time to find a successor a statement should be put out saying that Mr Taylor had been dismissed with immediate affect. However, the hawks on the board backed down after consultation with both Barclays lawyers and lawyers acting for Mr Taylor.
The angry boardroom scenes came after Sir Nigel Mobbs, the senior non- executive called in to deal with the crisis, asked Mr Taylor over lunch on Wednesday to stay on until a succession plan could be put in place.
The tension between Mr Taylor and his board goes back at least two years, but was brought to a head by a row at the October board meeting over the former chief executive's proposals to demerge the bank's corporate and retail operations.
Other board members have rounded on Sir Andrew Large, deputy chairman, criticising him for compounding the difficulties on the board by seeking to get involved with day-to-day management decisions that were not properly his responsibility.
With relations deteriorating, Mr Taylor agreed two months ago to the appointment of Spencer Stuart as outside headhunters to examine alternative candidates for his job.
Sir Peter Middleton, who stepped into the breach, will be spending most of the week talking to shareholders who have been unsettled by the recent events. Barclays' board is due to meet in two weeks to put together the outlines of a strategy for rebuilding confidence in the bank.
As the search for Mr Taylor's replacement began, Chris Lendrum, the head of Barclays' UK corporate banking business has emerged as the internal front-runner to take over as chief executive from Martin Taylor who quit the bank in dramatic fashion last Friday.
Senior Barclays executives have said that they would prefer to look outside the bank. Among the more plausible names being put forward yesterday were Peter Burt, the well-regarded chief executive of the Bank of Scotland, Peter White, chief executive of Alliance & Leicester and Martin Gray, head of retail at NatWest.
However, industry insiders say the dearth of obvious candidates for the job may lead the board to settle for the option of an internal promotion after all.
Mr Lendrum, who joined the main board in June, is a career Barclays man who came up through the same central planning route as Malcolm Williamson who went on to run Standard Chartered, the UK quoted Asian bank.
Analysts have suggested a management buy-in by Alliance & Leicester or even Bank of Scotland might be the solution. But the idea was dismissed as "laughable" by Barclays insiders. One said: "It is a ridiculous and highly risky way to get yourself a new chief executive."Reuse content