Barclays also was moving toward raising capital from outside investors, such as those in the Middle East or Asia, the paper added, citing unnamed sources.

Neither Lehman nor Barcalys could be reached immediately for comment.

"Nothing really changed in Lehman’s business model, but the market has changed and investors want banks to hold more capital, and Lehman and many other companies were caught flat footed," said James Ellman, president of Seacliff Capital in San Francisco, a hedge fund that invests in financial services stocks.

"For better or for worse, Lehman has lost control of its destiny. The central bankers and the credit markets control its destiny now."

The capital raising would come as banks have written off some $350 billion of mortgages and other assets hit by the global credit crisis, sold large stakes to foreign governments and slashed jobs.

Lehman had been expected to report quarterly results during the week of June 16, but media reports have said it may release its results early.

Wall Street analysts last week said they expected Lehman to incur losses from hedging in the second quarter amid an overall tough operating environment.

According to Reuters Estimates, analysts’ average profit forecast for Lehman has fallen to break-even and, on an operating basis, a loss of 29 cents per share. A month ago, analysts had forecast net income of $1.13 a share.

(Reporting by Paritosh Bansal and Dan Wilchins, editing by Martin Golan)