A millionaire City executive and “totally devoted father” killed his two-year-old daughter by smashing her head against the floor because he believed she had been taken over by a “malign and satanic entity”.

Alberto Izaga, 36, thinking that he was in a struggle between good and evil, attacked his daughter Yanire as his wife begged him to stop at their multimillion-pound flat overlooking the Houses of Parliament.

Izaga, head of life and health products for Swiss Re, the insurance giant, was found not guilty of murder by reason of insanity by a jury in a rare legal decision at the Old Bailey yesterday. He will continue to receive treatment in a secure hospital.

In a statement, his wife Ligia said that they were trying to come to terms with what had happened and were trying to rebuild their lives.

“The best times were when the three of us were together as Yanire would always start singing. She became our lives; everything we did was with her in mind. We just don’t want to live without her.”

In the hours leading up to the “mad frenzy”, Izaga, who had described Yanire as the “most precious treasure on earth” was shouting and rambling about how his colleagues were part of a sect and were taking over the financial world, the court heard.

Timothy Exworthy, a consultant psychiatrist, told the court that Izaga also believed that he and his wife were inhabited by the Devil. He said that Izaga has no clear recollection of the attack.

The assault happened the day after he returned from a business trip to Geneva, where colleagues said he seemed stressed. Izaga woke up at 4.30am and began rambling about the sect and Jesuits to his wife. Izaga told her that he had not slept for 72 hours. When she asked him not to wake their daughter Izaga, who was born in Spain and went to a Jesuit university, grabbed Yanire and swung her viciously against the wooden floor.

Yanire suffered multiple skull fractures and brain damage and was declared dead two days later.

During the incident his wife made several phone calls and the transcript of messages she left were read to the court. She was heard screaming for help while her husband said, “Please die, please die.”Izaga spoke in court only to deny the murder in June last year. Jonathan Rees, for the prosecution, said: “Mr Izaga was universally liked and admired by those who knew him. He was a doting husband and father who played a full part in domestic life notwithstanding the demands of his job. Even with the benefit of hindsight it is difficult to detect any signs that the defendant was going to lose control in the way he did.”

Talking about the start of the attack Mr Rees added: “Referring to his fellow executives at Swiss Re . . . he appeared to indicate that they were part of a sect; that they were trying to take over the financial world. He was talking incessantly in a way he had never done before.”

Judge Richard Hone, QC, told the jury that this was a unique case and although both the defence and prosecution agreed what happened, a jury verdict was required by statute.

Mr Rees said that two psychiatrists agreeed that Igaza was insane at the time of the attack, “which is why you will be asked to return a verdict of not guilty by reason of insanity”.

The judge made a hospital order under section 37 of the Mental Health Act 1983, coupled with a restriction order under section 41 of the Act. Izaga will have his defence costs paid by the taxpayer.

The judge said his provisional view had been that such an order would “stick in the throat”, but he changed his mind after an application by David Perry, QC, for the defence, and said: “In the circumstances of this exceptional and rather heart-rending case I do not wish there to be prejudice to Mr Izaga and also his family.”

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