Govt 'did not approve' €7.4bn transaction between Anglo and IL&P

The Department of Finance has said that a €7.4bn transaction between Irish Life and Permanent and Anglo Irish Bank was not approved by the State.

The denial follows a report in The Sunday Times which said the loan was agreed with the State.

In a statement issued this evening, The Department of Finance said the suggestion that a departmental official had said the transaction was important for the Irish banking system was "completely untrue" and that: "There is absolutely no evidence for the claim."

The statement also said it was Department of Finance officials that had identified the transaction in question and alerted the Financial Regulator.

The Department also said that both the chairperson and former CEO of Irish Life and Permanent had made clear that neither the board of ILP nor the Financial Regulator knew of the transaction in advance so it could not have been given prior approval.