Claim that Lenihan said he was overruled 'doesn't sound right', says former advisor

The former special advisor to the late Finance Minister Brian Lenihan says "it doesn't sound right" that he would have said he was overruled on the night of the bank guarantee.

Central Bank Governor Patrick Honohan has claimed that that Mr Lenihan told him that Brian Cowen ruled out nationalising Anglo on September 29, 2008, in favour of the blanket guarantee.

Cathy Herbert said that it was a "difficult day" when Mr Honohan gave a radio interview effectively confirming we were going into a Troika bailout programme.

She said that Mr Lenihan was not annoyed about it for long, however.

"It wasn't a great moment, but he had to deal with … he clearly went out and said: 'Yes, this is the case'," she said.

"He was irritated by it, Brian Lenihan was only ever irritated briefly.

"I mean, not long afterwards, he said to me [that] the Governor had his own pressures, he's a member of the ECB, he's independent in the exercise of this duty."

She added: "He got over it."

She also said Ireland's corporation tax rate did come under specific attack during the Troika bailout negotiations.

She said Lenihan knew Ireland would end up in some form of a bailout, but believed it could have been delayed to see market reaction to the 2011 budget and implementation of the four-year-plan.

"They could be in a position to say: 'this is our condition' … they were saying, 'if we're going to bail you out, we're going to want changes on this'."

She said Ollie Rehn, who was European Commissioner for Economic and Monetary Affairs at the time, specifically raised the issue of corporation tax during his November visit.