Ministers are to order an independent review into the inter-bank lending rate in the wake of revelations that it was rigged by bankers.

And Bob Diamond, the under-fire Barclays chief executive facing calls for his resignation, has been summoned to appear before the Treasury Select Committee on Wednesday.

The review will consider the future operation of the so-called Libor rate and the possibility of introducing criminal sanctions for its manipulation.

The move did not satisfy Labour, however, whose leader Ed Miliband insisted the public would not accept anything less than a full-scale independent inquiry into the culture and practices of banking.

His call came after the Financial Services Authority uncovered "serious failings" in the sale of complex financial products to small businesses, just days after the rate-rigging affair emerged at Barclays.

Taxpayer-backed Royal Bank of Scotland has also confirmed it is being investigated for manipulating the rates at which banks lend to each other.

Treasury sources said its review, to be headed by an as-yet-undisclosed independent figure, would ensure a speedy response to the issue, resulting in amendments to the Financial Services Bill this summer. Ministers are considering setting up a separate review into the professional standards of bankers.

Prime Minister David Cameron said the Government would ensure "the criminal law can go wherever it needs to". Asked about calls for a wide-ranging inquiry, he said: "Let's take our time, think this through carefully... That's what I'm determined to do, and that's what we will do."

But Mr Miliband said the Prime Minister was "out of touch" and warned that voters would not accept "the establishment closing ranks".

He called for an inquiry along the lines of Lord Justice Leveson's into media ethics and practices. "I have news for David Cameron - the people of this country want a moment of reckoning for our banks," he told a Fabian Society conference in London.