04/07/2012 08:45 BST | Updated 04/07/2012 15:50 BST

PMQS: Bank Donations To Tories Stopping Cameron From Acting On Barclays, Says Miliband

Ed Miliband has accused David Cameron of failing to launch a proper inquiry into the rate-fixing scandal because the Conservative Party is "bankrolled by the banks".

Speaking during Prime Minister's Questions on Wednesday afternoon, the Labour leader said Cameron did not appreciate the "depth of public concern" about the revelations that Barclays' manipulated the Libor inter-bank interest rate.

"Whenever these scandals happen he is slow to act and stands up for the wrong people," he said.

"His is a party bankrolled by the banks. If he fails to order a judge-led inquiry people will come to one conclusion, he simply can't act in the national interest."

The prime minister has proposed a parliamentary inquiry made up of MPs and peers be launched into what went on at Barclays.

However the Labour Party has said that is not good enough and has called for a wider independent judge-led inquiry into the banking sector on the scale of the Leveson inquiry into phone hacking.

MPs will be given the chance to vote on which sort of inquiry they would like to see set up on Thursday.

Cameron told the Commons today that a judge-led inquiry would take too long to report as the government wanted to hear its conclusions by Christmas in order to legislate next year.

"The banking scandal is appalling," he said. "It is outrageous that home owners may have paid higher mortgage rates because of spivvy and probably illegal activity in the City."

"People want to know that crime in our banks and crime in financial services will be punished like crime on our streets."

The prime minister said a parliamentary inquiry could be "swift and decisive" and report back "as fast as possible".

Miliband suggested that one way to ensure a judge-led inquiry could report quickly would be to split it into two parts, with the first part addressing the Libor scandal and reporting back by Christmas and the second part taking longer and looking into the wider culture of the banks.

Responding to accusations that the scandal was the fault of the Labour ministers who were in power at the time Miliband said the prime minister had wanted even less regulation of the banks at the time.

The Labour leader quoted Cameron saying in 2008 that the "problem of the past decade is too much regulation".

"Doesn't it say it all about double standards of this prime minister?" he said.

Miliband and Cameron clashed in the Commons two hours before the former chief executive of Barclays Bob Diamond was due to appear before MPs at the Treasury committee.