Barclays' shareholders snapped up all of the £500 million of preferred stock that the bank offered to them yesterday as an olive branch to calm the row over its controversial fundraising plans.

Having been attacked over the way it went to Arab investors to raise the £7 billion it needs to shore up its balance sheet, chief executive John Varley offered to open part of the package to its existing shareholders.

This was aimed at assuaging some of their anger at the fact that they had not been given "first dibs" at buying into the new fundraising securities, which yield an interest rate of 14%. As a result of the fundraiser, existing shareholders' stakes will be diluted as the Qatari and Abu Dhabi investors will be left with nearly a third of the bank.

Before the statement, which saw the board pledge to sacrifice bonuses and give shareholders a chance to vote them out of office at a meeting next week, Varley sounded out shareholders on how much they were likely to pledge and the figure of £500 million was decided upon. In the event, they applied for a few million pounds more.

The fact there was only this much appetite highlights why Varley felt the need to go to Qatar and Abu Dhabi. But many shareholders still feel Barclays should have taken a taxpayer handout.

Sumitomo Mitsui Financial, which four months ago bolstered Barclays with a £500 million cash injection, is raising money to boost its own balance sheet. Japan's third-largest bank is trying to raise up to 400 billion yen (£2.74 billion) through share sales amid concerns about losses on stocks and bad loans.