The exterior of the world headquarters for Lehman Brothers can be seen in New York, May 19, 2008.

BEIJING, Sept. 15 (Xinhuanet) -- Barclays, UK's third largest bank, Sunday withdrew its bid to buy investment bank Lehman Brothers Holdings Inc., U.S. media reports said.

A source, who spoke on condition of anonymity, citing company policy, said the decision was "very unlikely" to change, adding that while Lehman was attractive, the investment bank did not meet what he described as Barclay's stringent requirements.

According to the reports, the U.S. government officials and top Wall Street bankers continued to try to sell the investment bank and avert a collapse that could severely disrupt global markets, but the decision by Barclays further complicates that effort.

"The Fed and the Treasury are trying to get a deal done before the markets open on Monday. It now appears that this original effort to merge Lehman with one party has failed," said David Kotok, chief investment officer at Cumberland Investments.

The talks, according to reports, were stuck over whether the Federal Reserve would guarantee a deal with Lehman's troubled mortgage securities as was done to avert a meltdown earlier this year of Bear Stearns, bought by JPMorgan Chase.

The walk-away decision triggered expectations the investment bank is heading into bankruptcy. "I think the most likely option for Lehman is a bankruptcy filing by the end of the day today," said Peter Cohan of the consulting firm Peter Cohan & Associates.

Lehman shares have tumbled more than 90 percent this year and lost an estimated 3.9 billion dollars in its fiscal third quarter.

The U.S. government has ruled out using public money to save Lehman, but treasury officials fear that a quick liquidation of a bank so big and interconnected with other financial institutions could cause panic in the financial world.

Peter Morici, economist at the University of Maryland, said Lehman's demise might hasten needed reforms on Wall Street.

"Sooner or later after enough dominos fall, compensation structures and business practices will return to more conservative norms of 10 and 20 years ago," Morici said. "Only then will the credit crisis resolve and the economy have a decent shot at full recovery."