Qatar Holding, the biggest shareholder in Barclays, said it sold 35 million shares in the British bank to cut its stake to 5.8 per cent from just over 6 per cent.

Qatar Holding said it remained a supportive long-term shareholder in Barclays and sold the shares 'as part of a volatility-driven portfolio management strategy which it applies to a small part of its aggregate holding,' according to a report in our sister newspaper Gulf Daily News.

Qatar Holding is the prime vehicle for strategic and direct investments by the government. It is an arm of Qatar Investment Authority founded in 2005 to strengthen its economy by diversifying into new asset classes.

Barclays said the share sale was on Friday, when its shares closed at 227 pence, valuing the stake at £79 million.

Qatar bought shares for 282 pence apiece as part of a £4.5 billion fundraising in June, and topped up its investment during another fundraising in November.

The sale leaves Qatar with 488 million Barclays shares. Its stake is due to increase by 326 million shares upon conversion of mandatory convertible notes before the end of June.

The shares jumped 9.6 per cent yesterday to close at 218 pence.