The European Commission has approved the move to allow Anglo Irish Bank and Ulster Bank assume full control of Dublin department store Arnotts.

Arnotts is struggling with debts of €300m.

A leading retail specialist and CEO of private equity firm Palladin Capital Group, Mark Schwartz, is set to be appointed to oversee the management of the business.

Mr Schwartz has been working closely with the banks and Arnotts for the last five months.

In a statement, Anglo Irish Bank said it and Ulster Bank were totally committed to Arnotts.

The banks will not be involved in the management of the company but said they are taking the 'necessary steps' to ensure that the company will be run by experienced professionals in the best long term interest of the staff, suppliers and customers.

'While there has been understandable concern in recent days about the future of Arnotts, I wish to reassure staff, suppliers and customers that this great institution will continue to play a leading role in the Irish retail market,' Mr Schwartz said.

The Mandate trade union has said it is looking forward to engaging with the new management of Arnotts regarding the future of the store.

Assistant General Secretary Linda Tanham said the union looked forward to engaging with the management on an ongoing basis ‘regarding the future of Arnotts as a retail business so that we can secure the jobs and terms and conditions of the staff who have contributed so much to the company’.