Barclays is seeking to raise about £4bn by selling part of its $1tn (£706.4bn) fund management arm in a further attempt to raise capital without turning to the government for any direct financial support.

The bank confirmed this morning that it has held discussions "with a number of potentially interested parties" as part of its practice of regularly reviewing the group's portfolio of businesses. However, it said no decision regarding the disposal of any business has been taken.

Barclays also said its businesses "continue to perform well and have had a strong start to 2009".

The bank's shares were up nearly 14% by 8.15am, rising 10p to 84.1p.

The bank is thought to be in advanced talks with several US institutions and private equity investors to sell a chunk of its iShares division.

The windfall from a partial sale would bolster Barclays's balance sheet. The bank's core tier-one capital ratio, an indication of its financial strength, is low compared with a number of its rivals, and some analysts said it needs further cash to cushion it against future writedowns.

A large cash pile would also help the bank to continue to resist government control. Chief executive, John Varley, has in recent days begun negotiations with the Treasury about joining its insurance scheme for bank assets but is anxious to protect Barclays's independence.

In its statement today, Barclays confirmed that it is talking to the Treasury and the Financial Services Authority about its potential participation in the asset protection scheme (APS), but said: "Barclays's decision whether, and to what extent, to participate in the scheme will be based on the economic merits to shareholders of any such participation."

Instead of turning to the government for aid, Barclays has raised billions from investors in Qatar and Abu Dhabi, who together now own almost a third of the bank.

If Barclays signs up to the APS, it would have to pay fees, either in cash or by issuing shares to the government. Barclays would prefer to pay fees in cash, using the proceeds from any iShares sale, for example, to contribute to the cost. Allowing the government to take a stake in the bank is likely to come with conditions attached. These could include forcing it to withdraw from overseas markets and focus on domestic lending, or to comply with other restrictions on its activities.

Lloyds Banking Group and Royal Bank of Scotland have already applied to insure almost £600bn of assets. This means the taxpayer covers most of the losses if any of the loans - which could include commercial, consumer or mortgages loans - default. Under the terms agreed with Lloyds, the bank pays the first 10% of losses, with the government picking up the tab for the rest.

The terms for Barclays to join have not been fixed. Whether Varley signs up depends on the fees Barclays would have to pay, whether there are any government conditions attached, how many assets Barclays must submit and how many assets the bank can afford to insure. Negotiations with the Treasury will intensify in the coming days, with the deadline to apply to the APS expiring at the end of the month. The bank's chairman, Marcus Agius, and Sir Richard Broadbent, a senior independent director, are meeting large institutional investors to gauge their views on the price they should be prepared to pay for the insurance.

Barclays has already submitted a £10bn tranche of assets to the Treasury for assessment. But the government has indicated that if the bank joins the scheme, it would need to offer up its entire balance sheet for close examination.

Credit Suisse analyst Jonathan Pierce estimated that Barclays has up to £80bn of problematic loans that could be submitted to the insurance programme.

There is an added complication for Varley as he weighs Barclays's next move. If the bank is forced to issue new shares - whether to the government or through a rights issue - it could trigger a clause that could, in effect, hand its Middle Eastern investors control of the bank.

Over the weekend, a Barclays spokesman insisted the bank was in a healthy financial position, having last month announced profits of £6bn for 2008. He said the bank had also made lengthy presentations to the City to explain the extent of its assets and liabilities.

Based in San Francisco, iShares, which makes up about a quarter of Barclays' global asset management unit Barclays Global Investors, specialises in exchange-traded funds that track indices or sectors.

The sale process is believed to be advanced, although there is no guarantee that a deal will be completed. Its progress, and the continuing negotiations with the Treasury, come before what promises to be a stormy annual general meeting next month.

Some institutional investors are still gunning for the Barclays chairman, who is blamed in large part for the deal the bank struck in October to allow investors from Qatar and Abu Dhabi to buy a stake of up to 30% in the bank at preferential rates for £5.8bn.