Bank of England Deputy Governor Paul Tucker will give evidence to MPs next week on the rate-rigging scandal after he was dragged into the affair by former Barclays chief executive Bob Diamond.
Mr Diamond revealed a record of a conversation with Mr Tucker in October 2008 in which the Deputy Governor relayed concerns in Whitehall about Barclays' high Libor rates.
Mr Tucker will appear before the Treasury Select Committee on Monday to give his side of the story, after requesting an opportunity to clarify his role in the crisis.
The confirmation came as MPs debated whether Parliament or a judge should stage an investigation into the deliberate fiddling of the Libor, which affects mortgages and loans everywhere.
Chancellor George Osborne and his opposite number, Ed Balls, were involved in angry exchanges over allegations that the shadow chancellor was involved in the Libor rate-rigging scandal.
Mr Balls denied any involvement and claimed Mr Osborne's "cheap and partisan" conduct "demeans the office he holds".
Mr Osborne made the claims in The Spectator today.
He said: "As for the role of the Labour government and the people around Gordon Brown - well, I think there are questions to be asked of them.
"They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when."
Labour and Westminster's minority parties were pushing for an independent "forensic" judicial public inquiry, claiming it is the only way to restore public faith in the disgraced industry.
But the coalition insists a parliamentary investigation is the best way to get speedy recommendations that can be included in a banking reform Bill early next year.
Labour leader Ed Miliband insists the two-part judicial inquiry he is pushing for would report back on Libor rate-fixing by the end of the year before going on to look at wider issues. The whole thing would be wrapped up by summer 2013 and the cost would be met by the banking industry, Labour's motion says.
It has been backed by the DUP, SNP, SDLP, Plaid Cymru, Green Party and Independent MP Sylvia Hermon.
But the motion is expected to be defeated by the coalition and Mr Miliband is keeping his cards close to his chest over whether he would oppose the Government's move for a parliamentary inquiry.
The man chosen by the coalition to chair the parliamentary joint committee - the chairman of the Commons Treasury Committee, Tory MP Andrew Tyrie - has said he will not go ahead unless there is cross-party consensus.
Prime Minister David Cameron insisted yesterday that there was no difference between him and the Opposition on the seriousness of the rate-rigging scandal.
"It is outrageous, frankly, that homeowners may have paid higher mortgage rates and small businesses may have paid high interest rates because of spivvy and probably illegal activity in the City," he said.
"People want to know that crime in our banks, crime in our financial services, will be pursued like crimes on our streets."
MPs on all sides are expected to be whipped to back the party line in the votes.
Barclays was dealt another blow earlier in the day as agencies Moody's and Standard & Poor's downgraded their outlook for the bank's credit rating in the wake of Mr Diamond's departure.
The agencies said the departure of Mr Diamond, as well as chairman Marcus Agius and chief operating officer Jerry del Missier, could lead to the break-up of its powerhouse investment arm.
Mr Diamond yesterday admitted feeling "physically ill" when he discovered traders had fiddled the key rate but denied he was "personally culpable" for their actions.
He blamed a "series of unfortunate events" for his shock departure as he fended off calls to give up his multimillion-pound bonuses.
The American banker said Mr Tucker was trying to warn him that "there are ministers in Whitehall who are hearing that Barclays is always high, that could lead to the impression that you are not funding yourself".
But he told the Treasury Select Committee: "My recollection is Paul did not mention who he was referring to or I would have put it in the note."
Mr Miliband said the case for a judge-led inquiry was being made for him by Mr Osborne seeking to politicise the debate and the failure of the Select Committee to extract full answers from Mr Diamond.
He declined to say whether the Opposition would support a parliamentary inquiry should the Commons vote for one but said the position would be declared by the end of the day.
He warned that voters would not forgive politicians if they failed to grasp the chance for a fundamental shake-up of the banking industry.
"Throughout the last week George Osborne has just sought to play politics with this issue," he said.
"In a way he is making a great case for why we shouldn't have a parliamentary inquiry but a judge-led inquiry independent of politics."
Mr Miliband spoke out as he visited a small family firm hit by the mis-selling scandal involving interest rate swap arrangements - which he said was further proof of the need for a wide-ranging probe beyond just the Libor scandal.
And he called on the City watchdog to extend its protection scheme for victims of the mis-selling after hearing that the firm he visited - Henderson Signs in Putney, south-west London - may not be covered.
The Treasury select committee also confirmed that Barclays chairman Marcus Agius, who announced his intention to resign after a replacement for Mr Diamond is found, will appear on Tuesday, July 10.
Mr Agius had been scheduled to appear today but the hearing was postponed.