Varley blamed for row over Barclays closures

John Varley, Barclays' retail boss, is coming under pressure from investors over the poor handling of the group's decision to close 172 branches, mostly in remote areas

The move, along with publication of a proposed incentive plan which could see Matt Barrett, the bank's chief executive, and Mr Varley benefiting from multi-million -pound bonuses, have led to heavy criticism of the bank in the City.

Although shareholders are expected to approve the incentive plan at next month's annual general meeting, this will not be without protest. Leading shareholders have said Barclays appeared not to care for rural communities, and this lack of consideration would have an effect on other customers as well as politicians and regulators.

"The scheme appears insensitive in the current climate," argued one leading shareholder. "The group has presented itself poorly, and I'm afraid John Varley has come into the spotlight over this."

Another shareholder commented that the group did not understand how the climate had changed in the City, so that investors were becoming increasingly aware of the social responsibilities of the companies in which they invest.

"Barclays has to be aware of the impact of reputation on shareholder value," said another large investor. "The buck stops with the board. They have to understand that risk and reward go hand in hand."

In an attempt to calm the situation, Matt Barrett sent a letter to all 55,000 staff in Barclays on Friday.

In the letter he said he wanted to give "a full and frank communication of our view and reasoning".

Mr Barrett argued that some of the coverage of Barclays over the last few weeks had been excitable and that headlines saying he could earn £30m from the new incentive plan overstated the position. "For me to qualify for the kind of payout widely quoted ... our share price would have to rise to £180 in the next three years, up from £17 today."

He concluded: "Never forget it is in society's interest that we are big and successful."