Initial euphoria that Barclays had escaped the worst of the banking crisis evaporated today as City analysts queued up to predict the High Street bank will be forced to call for a handout from the British taxpayer.

After a share-price collapse on Friday, Barclays today came back fighting, saying its profits for 2008 will be higher than most City expectations.

But investor fright at the extent of the Government's second banking bailout and fears Barclays does not have enough funding capital on its balance sheet saw initial gains in Barclays shares wiped out, in line with steep falls among rivals Royal Bank of Scotland, Lloyds Banking Group (now including Halifax group HBOS) and HSBC.

Growing fears the British banking system could be on the verge of collapse saw Barclays shares nearly halve last week, falling on Friday alone by 25%.

Crucially for Barclays investors, today's second bailout of the UK banking system, which saw state ownership of RBS extended to 70%, did not include direct intervention by the Government. In the autumn, Barclays raised £7 billion from Middle East investors in return for a 32% stake.

Barclays shares, which dived to 98p from 130.4p on Friday, topped 121p at today's open after the bank issued a statement saying: "The board of Barclays knows no justification for the fall in the share price."

Barclays added that it would beat City forecasts of profits for 2008 of £5.3 billion, even after a raft of multi-billion-pound writedowns. However, by afternoon trading, the stock was firmly back in negative territory, off 7p or 7% at 91p.

Analysts at Dresdner Kleinwort were among the first to puncture investor hopes, saying: "We are concerned the profit update is insufficient to bring investor concerns down.

"A possible future shortage of capital following further asset deterioration could eventually push the bank into the arms of the Government if existing shareholders are unwilling or unable to provide yet further support and share price weakness persists.

"Ongoing share-price weakness could trigger a self-fulfilling prophecy whereby the decreasing ability to recapitalise the bank and any subsequent negative rating actions could ultimately trigger Government intervention...on terms that could be less favourable and may lead to nationalisation and leave shareholders empty-handed."

Barclays had also said it expected its core tier one ratio to be between 6% and 7% - a measure of the financial well-being of a bank where the lower the figure, the weaker the bank's funding.

Merrill Lynch believes Barclays' underlying key capital ratio to be at 6.2%.

"Given the capital position of European peer-group banks - sector average 7.2% - we think Barclays' relative position looks less comfortable than before this announcement," said Merrill.

"In addition, any further sterling weakness could cause capital ratios to suffer further owing to the lack of hedging in the capital base."

Panmure Gordon said it believes Barclays has "further to go" in writing down the value of its loan book and property exposure.