Chancellor George Osborne tonight directly accused members of Gordon Brown's government of involvement in the rate-rigging scandal.
Osborne said the former Prime Minister's inner circle, including current shadow chancellor Ed Balls, had "questions to answer" over apparent pressure on Barclays to post lower Libor rates during the credit crunch.
Osborne: 'Ed Balls has questions to answer'
The comments - in an interview for Thursday's Spectator magazine - came as Bob Diamond insisted he could not shed any light on the identity of "senior Whitehall figures" who suggested the rates were too high.
Giving evidence to the Treasury Select Committee, the former chief executive said Bank of England deputy governor Paul Tucker had relayed the concerns to him in a phone call in October 2008.
Diamond said he believed 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 added: "My recollection is Paul did not mention who he was referring to or I would have put it in the note."
Pressed by Tory committee member Michael Fallon on whether Tucker could have meant the then Cabinet Office minister Baroness Shriti Vadera, Diamond said he would only be "speculating".
The former Barclays boss also told MPs he felt "physically ill" when he discovered traders at his bank were manipulating the inter-bank interest rates.
Both Balls and Lady Vadera have denied speaking to Tucker about Libor.
But Osborne told The Spectator: "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."
And he added: "They were clearly involved and we just haven't heard the full facts, I don't think, of who knew what when."
The Chancellor insisted that the Bank of England itself had been cleared of instructing Barclays to fiddle its rate.
This charge has been "specifically addressed, not just by our own investigators at the Financial Services Authority but also in the US Department of Justice", said the Chancellor.
"And they are not people who will pull their punches, and they're very clear that the Bank did not issue instructions to Barclays to cut its Libor rate."
Speaking before the publication of Osborne's interview, Balls told the BBC: "At no point did I have any conversations with Mr Tucker at all at any time when I was a Treasury minister and Treasury adviser or, subsequently to that, when I was a Cabinet minister.
"I had no conversation with anybody about the Libor market during any of those periods and at no point, in any of the time that I was a minister or an adviser, were concerns raised about the Libor market from the FSA, the Bank or the Treasury to me.
"The idea that I have an issue on this... is completely false and untrue... and I would be very happy to say that to an inquiry."
Lady Vadera also rejected claims that she authored a Treasury note titled "Reducing Libor" but insisted that it dealt with entirely legitimate government concerns.
"I did not have a conversation with Paul Tucker about Libor," she told BBC Radio 4's The World at One.
"I did not have the conversation that is being alleged and I didn't write that note.
"I commented on the note, in particular to focus the issues on the lending conditions in the real economy for real people."
Asked if anyone in the Labour government had suggested to the Bank of England that the rate should be manipulated, she said: "I can only speak for myself. I can't obviously speak for everybody in government.
"You asked me if Libor was a concern and of course it was a concern. There is nothing wrong with concerning yourself with access to credit. That's the job."
Shadow Treasury minister Chris Leslie said: "This is desperate stuff from George Osborne - lashing out in a frenzied way that demeans the office of the Chancellor of the Exchequer.
"It's now increasingly clear that he isn't interested in getting to the truth, only in playing party politics and throwing around false allegations with no evidence.
"This is why we need an independent, forensic, public and judge-led inquiry that can rise above party politics. David Cameron and George Osborne need to explain why they have spent the last week desperately trying to resist one."
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