Finance minister Brian Lenihan today denied plans to split Anglo Irish Bank into two separate institutions were a fig leaf to mask confusion over how to deal with the situation.
Amid rowdy scenes during a parliamentary committee, Mr Lenihan insisted he was working out a “resolution regime” for the rogue lender.
This would include the option of downsizing the nationalised bank over time, he added.
“Far from being a fig leaf, it is a precise structure that was recommended to me in late August by the Governor of the Central Bank (Patrick Honohan),” he added.
Mr Lenihan said the Central Bank and Financial Regulator were currently in talks with Anglo chiefs to work out the total cost of the bailout to the taxpayer.
A final figure should be available by early October.
“It will be a figure independently arrived at by the regulator,” he said.
But Labour Party’s finance spokeswoman Joan Burton said people had had enough of “shilly shallying” around the Anglo “nightmare” and wanted Mr Lenihan to "level with them".
“The problem is the people in Anglo are surviving the swamp,” she said. “It is the rest of us and ordinary businesses in the real economy that are going down the tubes for the sake of Anglo.”
Ms Burton said recently-announced plans to divide Anglo into an assets resolution bank and a savings bank were a “fig leaf” to save Mr Lenihan’s reputation.
Rounding on the Government’s handling of the banking crisis, she added: “Your strategy is leading this country perilously close to the rocks.”
Responding to Mr Lenihan’s charge that the country’s position was too serious for rhetoric, Ms Burton said there was a common end to make sure Ireland did not lose its sovereignty and fall into hands of the International Monetary Fund.
As tensions flared, the meeting of the joint committee on finance and public service had to be suspended for a short time to restore order.
Fine Gael deputy finance spokesman Kieran O’Donnell came under attack for making public statements that Mr Lenihan claimed were damaging Ireland’s international reputation.
Mr Lenihan said he was advised by an analyst that suggestions from Mr O’Donnell that Ireland explore the possibility of defaulting on bonds were not helping the country on world markets.
Mr O’Donnell insisted he did not suggest that and was being misrepresented.