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Barclays has confirmed it is in talks to take part in the government's Asset Protection Scheme (APS) to insure bad assets.

Royal Bank of Scotland and Lloyds Banking have both entered the scheme putting £325 billion and £260 billion under protection – but handing over greater slices of the businesses to the Treasury.

A Barclays statement read: "Barclays also confirms that it is in dialogue with HM Treasury and FSA regarding its potential participation in the Government's Asset Protection Scheme.

"Barclays decision whether and to what extent to participate in the scheme will be based on the economic merits to shareholders of any such participation."

The bank is keen not to hand over a major chunk of shares to the government in exchange for participation in the APS – after already seeking support through the financial crisis from Middle East investors.

The fee to cover the insurance scheme – whereby the bank would take the first hit on losses on assets thereafter with the taxpayer facing the burden – could come from the sale of Barclays' fund management division iShares.

Barclays confirmed it was in talks for with potential buyers for the San Francisco- based division but no decision has been made.

The Telegraph reports Barclays is near a £5 billion deal to sell iShares, with the money raised used to cover the APS premiums and bolsters its capital reserves.

Barclays added the firm's businesses "continue to perform well and have had a strong start to 2009".

The Barclays share price was up on the news – rising 14.04 per cent to 84.50p at 09:19 GMT.