Taoiseach Brian Cowen has confirmed that the issue of the solvency of Anglo Irish Bank was brought up with the Government on the night they implemented the bank guarantee scheme.
Mr Cowen's admission comes as a TV documentary to be aired on RTÉ tonight will highlight how Anglo first asked Bank of Ireland to take it over on September 28, 2008.
Bank of Ireland refused, contacted AIB and both then met the Government, outlining the concerns about Anglo.
The recent banking inquiry reports highlighted how Anglo's solvency only became an issue with the regulators after the guarantee was introduced.
But speaking in Co Offaly this afternoon, Mr Cowen admitted it was one of a number of issues raised with the Government on the night of the guarantee.
"All of these issues were discussed on the occasion in question," Mr Cowen said.
"The Government made a decision at the end of the day which was about what was in the best interests of the country at that particular time."
Mr Cowen's admission comes as Finance Minister Brian Lenihan was set for talks on the future of Anglo with European counterparts and Commission chiefs.
Mr Lenihan is in Brussels for a meeting with Competition Commissioner Joaquin Almunia to discuss Anglo before similar talks with European counterparts at the EcoFin meeting on Tuesday.
With the nationalised bank €8.2bn in the red and facing a €25bn bailout, EC bosses are expected to sign off on their preferred option for the toxic lender this month.
Mr Lenihan is said to favour a 10-year wind down, with Anglo management pushing for a good-bank bad-bank split.
Last week Mr Cowen warned a quick wind-down of Anglo could ultimately cost €70bn and was not in the best interest of the taxpayer.
Reports of a rift between the coalition Government partners were also dismissed with Mr Cowen insisting the Cabinet was at one on the issue.
Senior Government representatives have been in advanced talks with European officials over the future of Anglo in the last few weeks.
Anglo chairman Alan Dukes this week said the bank preferred to see a good-bank bad-bank scenario with 80% wound up and a new viable bank created from the remaining good quality loan assets.
The state-run bank, which has been funded by €23bn of taxpayers’ money, said it expected further losses as more troubled assets were shifted off the bank’s books.