Chancellor George Osborne and his opposite number Ed Balls were involved in angry exchanges as MPs debated proposals for an inquiry into the banking scandal.
The pair clashed after Mr Osborne accused the shadow chancellor of being 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".
MPs will vote on whether to back Labour's call for a full, judge-led independent inquiry into the culture of banking or support the Government's preferred option of a parliamentary investigation.
In heated opening exchanges, with deputy Commons speaker Nigel Evans battling to maintain order, the shadow chancellor said Mr Osborne's actions illustrated the need for an independent investigation.
Challenged by Tory James Morris (Halesowen and Rowley Regis) on his actions in Government, Mr Balls said: "At no point, at any time when I was an adviser or a minister in the City, was any point put to me by the Financial Services Authority, the Treasury, the Bank of England or anyone in this House that there was any reason to doubt the integrity of the Libor market, which only came to light subsequently and has now been properly investigated."
Tory Nadhim Zahawi (Stratford-on-Avon) asked him: "Can you confirm that in your time in office, no other minister either in No 10 or the Treasury spoke to the Bank of England on Libor that you know about?"
The shadow chancellor did not directly answer and told him: "The reason why we advocate an open, public inquiry, judge-led, is to get precisely to the bottom of all these things."
In an interview with the Spectator Mr Osborne said former Prime Minister Gordon Brown's inner circle, including Mr Balls, had "questions to answer" over apparent pressure on Barclays to post lower Libor rates during the credit crunch.
The bank's former chief executive Bob Diamond insisted to the Treasury Select Committee he could not shed any light on the identity of "senior Whitehall figures" who suggested the rates were too high.
Mr Balls told Mr Osborne: "The cheap and partisan and desperate way in which you and your aides have conducted yourselves in recent days does you no good, it demeans the office you hold and most important it makes it harder to achieve the lasting consensus we need."
He added: "What we have seen in the last few days makes the case more eloquently than any speech I can make, any speech any of us could make, for why we do need an independent, arms-length public inquiry to elevate this debate above the deeply partisan tone set by the Chancellor and his colleagues."
Mr Balls called on him to withdraw the "false, personal accusations" which were made "purely in the hope of political advantage".
The Chancellor told him that a report commissioned by UBS on Libor was seen by former Labour minister Lady Vadera and Mr Diamond had said the senior Whitehall figures involved were "ministers".
He called on Mr Balls to "explain what Labour's involvement was, who were the ministers, who had the conversation, who were the senior figures" and said he had to "answer for his time in office".
Mr Balls said Mr Osborne's allegation was "utterly false and untrue" and added: "The sight of a Chancellor who says one thing to the press but can't defend himself in Parliament is embarrassing to the office."
The Chancellor again challenged Mr Balls about who were the "ministers in Whitehall" who raised concerns with the Bank of England about Barclays' high Libor rate.
"Do you know who those ministers are?" he asked.
Mr Balls did not answer the question but again denied his own involvement.
Labour's motion calling for a judge-led review was backed by the SNP, DUP, Plaid Cymru, SDLP, Green MP Caroline Lucas and independent Sylvia Hermon.
Mr Balls said: "The reality is we must all admit that regulation should have been tougher, including those who argued for less regulation."
He said there was "massive public anger" following the disclosure of Barclays' attempts to rig the benchmark Libor rate and the revelation that major banks were involved in mis-selling interest rate swaps to small firms.
"The sense of outrage comes on top of a deep and wide public discontent at the huge price our economy and economies around the world have paid as a result of the gross banking irresponsibility in the run-up to the financial crisis," he said.
"A price which is measured in billions of pounds of loans gone and debts written off but is felt in the everyday lives of citizens in jobs lost, in small businesses gone bankrupt, in living standards undermined."
Mr Balls said that even if Labour lost the vote in the Commons tonight, his party would continue to argue for a full public inquiry.
Treasury Select Committee chairman Andrew Tyrie has insisted he will only chair a joint parliamentary committee if all sides are in agreement.
Mr Balls told the Commons: "As for the Government motion - I've said we will vote for our motion, I've said if it fails we will continue to press for a full public inquiry, we think that is the only way to do this properly.
"As for the Government motion, the Leader of the Opposition (Ed Miliband) and I will be voting against the Government proposal for a limited Parliamentary inquiry... as currently proposed, this is an inquiry not even remotely up to the task.
"What will we do if we lose? On the basis of the debate so far, and the Attorney General's comments, I would say all members of this House, including the Liberal Democrats, think hard, do the right thing, ignore the whips and vote for the inquiry that will work.
"We want to win this vote for the British people... only an independent and open public inquiry, not politicians investigating bankers, can rebuild trust."
But opening his speech, Mr Osborne urged MPs to come to a decision on an inquiry and then move on.
He said: "This House must come to a decision about how best to inquire into the Libor scandal that has shocked and angered the country, and the failure of the culture and standards in banking that allowed it to flourish for so many years.
"We have spent the last week and the last hour arguing whether a judge or members of this Parliament should conduct the inquiry.
"Let us bring the argument to an end today. Let us decide. To enable the decision to happen.
"I hope, although the argument has been a fierce one - and I've no doubt the partisan attacks will continue - can you tell us, if the House votes for a joint Parliamentary inquiry, will the Labour Party take part in it? If not, you will be blocking any inquiry into this banking scandal."
Intervening, Mr Balls said: "My advice to the Chancellor is to stop the speech, withdraw the motion and come back next week when you have done the homework."
As the ill-tempered exchanges continued, Mr Balls said the Chancellor had "impugned my integrity" and again demanded an apology.
The Chancellor told him: "The idea that I am going to take lessons in integrity from the man who smeared his way through 13 years of Labour government, who half the people who ever served with him think he was a disgrace in his post is another thing."
He challenged the Labour benches to admit to the conversation with the Bank of England's Paul Tucker about Libor.
"Who was involved, who was involved? Answer the question, one of you must know, hands up!"
Mr Osborne said it was "completely fanciful" for Labour to suggest a judge-led inquiry could produce a swift report.
"A judge-led inquiry would not allow us to amend the law, to deal with these things, in this Parliament.
"That's what I fear from a judge-led inquiry, it simply wouldn't enable us to come to the kind of decisions we need to make in this Parliament."
He said such inquiries were normally set up only when other investigations had failed.
He added that since the Inquiries Act was passed in 2005, only one investigation - into the fatal blast at the ICL plant in Glasgow - had concluded in under two years.
"The idea that a widespread, judge-led public inquiry into the culture and professional standards of Britain's largest industry is going to take place much quicker than a public inquiry into the explosion at a plastics factory in Glasgow I think is just fanciful.
"It just leads me to believe that the Labour Party wants to put off the moment when we actually investigate what happened."
Tory Claire Perry, a former adviser to the Chancellor, called for the inquiry to be held as soon as possible because the City had "suffered enough".
She said: "This is an industry that employs a million people, contributes £50 billion in income in direct corporation tax and employees contribute a further £25 billion in income tax.
"It is Britain's biggest export industry and it has suffered enough as the result of the appalling regulatory regime and the failure of moral compass."
Labour MP John Mann, who sits on the Treasury Select Committee, called for a judge to lead an inquiry, believing MPs on the committee would spend up to 18 months investigating banking.
He said: "That's the biggest reason why the joint inquiry isn't going to work; it simply isn't feasible that the chair of the Treasury committee could be seconded for that period of time.
"Members of the Treasury committee, however well resourced, in essence do two jobs simultaneously."