Peter Middleton, the group's newly appointed chairman-designate, is to assume Taylor's role until a new chief executive is appointed.

Middleton said Taylor's departure was "entirely his own decision" and was not related to any disagreement over merger plans.

"It is like a marriage that has come to an end with the partners remaining friends," Middleton told reporters in a telephone conference call.

Taylor leaves the group at the end of the year. Shares in Barclays slid on the news, falling 113 pence or 7.6 per cent, to 13.75 pounds in pre-market dealings.

Dealers also pointed to Barclay's statement that it expected pre-tax profits of not less than 1.9 billion pounds ($3.16 billion) in 1998, below consensus forecasts of around 2.2 billion.

Analysts were said to be cutting forecast in response.

"My task is to sustain the momentum of the groupand lead its very strong management team," said Middleton.

Barclays said Middleton had been appointed deputy chairman and would succeed Andrew Buxton as chairman following the appointment of a new chief executive.

Taylor said: "I have now completed five years with Barclays. We have all worked hard to reshape the business during this period. The group is in good health and well-placed to seize future opportunities. It is now time for me to stand down to allow the new management team to take the business forward."