Reuters reports Britain's top financial watchdog delivered a 10-point plan to fix LIBOR but stopped short of scrapping the benchmark interest rate in a much-awaited reform of a system plagued by scandal.

"The system is broken and needs a complete overhaul," said Martin Wheatley, head of the Financial Services Authority (FSA). Wheatley acknowledged problems with London interbank offered rates, but said LIBOR is so deeply entrenched in the financial system that it cannot be easily replaced. There are no better alternatives now and any transition to a new benchmark would be difficult, he said.

Longer term, it makes sense for market participants to examine whether there are other possible benchmark rates, Wheatley said.

The plan, which includes oversight by a new panel, marks regulators' first effort to fix the tarnished benchmark, but rulemakers have to thread the needle carefully. On the one hand, they must restore confidence in the financial system; on the other, they cannot take steps that are too radical without creating big trouble with existing transactions that use the benchmark.

More than $300 trillion of contracts and loans — from U.S. mortgages to Japanese interest-rate swaps - refer to LIBOR.

The UK government and Bank of England said the changes should proceed without delay. Greg Clark, financial services minister, said the proposals were considered, proportionate and credible.

Multiple banks have been accused of trying to manipulate LIBOR, a series of rates set daily in London. Barclays in June agreed to pay $453 million to U.S. and British authorities to settle allegations that it tried to move LIBOR to help its trading positions.