Minister for Finance Brian Lenihan has said a decision has to be taken in a matter of weeks on the future direction of Anglo Irish Bank.
Mr Lenihan was speaking before flying to Brussels for a meeting with European Competition Commissioner Joaquín Almunia to discuss the bank's future.
He said the Government cannot make a decision overnight and he said the matter will be discussed by European authorities.
Management at the bank have put forward the case that if the bank were allowed to engage in lending it might further reduce the cost to the taxpayer.
Mr Lenihan said the Government and the European Commission were looking at that proposal.
He added he was concerned at reports over the weekend that public opinion believed Anglo Irish Bank will bankrupt the country and reiterated that the costs are manageable.
Brian Lenihan disputed that there was a lack of confidence internationally in Ireland's ability to handle its problems.
He said a great deal of confidence had been expressed abroad in the Irish Government's decisions but he added that world conditions were weak at present and Ireland is suffering as part of that, but he emphasised, we need to hold our nerve.
The European Union is close to deciding on which of a series of options on the future of Anglo Irish Bank it is prepared to accept.
The option originally favoured by Government involved splitting what is left of the bank, after the NAMA transfer process, into a good bank serving industry and a bad bank.
The latter would recover whatever money it could from the remaining non-performing loans.
The second option was a wind down over a decade or more.
The Green Party has decided the split option would ultimately be the more expensive and has said it favoured a wind down but over a quicker timeframe.
Some experts said that could exacerbate losses to the State, already thought to be at €25bn because of the need to sell on loans more quickly.
Uncertainty about the State's future liabilities at the bank is one reason why the interest rate being demanded on Ireland's national borrowings remains out of kilter with other European countries.
FitzPatrick asked BoI to take over Anglo
Anglo Irish Bank asked to be taken over by Bank of Ireland on the same day the Government met to decide on the introduction of the bank guarantee scheme in September 2008.
The revelation is contained in the programme Freefall to be aired on RTÉ 1 television tonight.
Shares in Irish banks were falling rapidly on 29 September 2008 and Anglo Irish Bank faced the prospect of insolvency and being unable to open for the business the next day.
Anglo chairman Sean FitzPatrick and chief executive David Drumm approached Bank of Ireland governor Richard Burrows and CEO Brian Goggin at that time.
In a meeting at Bank of Ireland, Mr FitzPatrick and Mr Drumm said Anglo was facing insolvency and they asked Bank of Ireland to take over the bank but the request was turned down.
However, the overture prompted Bank of Ireland to contact AIB.
Both banks sought a meeting with Government, which was in the midst of crisis meetings on the introduction of a guarantee.
Bank of Ireland and AIB met Taoiseach Brian Cowen and Minister Lenihan and outlined their concerns on Anglo.
Budget 2011 set for 7 December
Minister Lenihan said that Budget 2011 will be delivered on 7 December.
Speaking on RTÉ's News At One, he said the Budget will not just be about the public finances, but it will also contain measures to boost confidence in the economy.
On his own health, the minister said he had completed courses in Chemotherapy and Radiotherapy at the end of June and the treatment had stabilised the cancer for the present.
Mr Lenihan said: 'It has improved somewhat but like all cancers, it is still there and it is a danger. It is not an immediate or clear or present danger to me.'
He added that he was in a good position to get on with the important decisions that have to be taken in the country in the next few months.