The head of the International Monetary Fund, Dominique Strauss Kahn, has said Ireland can manage its economy on its own.

Speaking on the sidelines of an Asia Pacific summit in Japan, Mr Strauss Kahn said Ireland's difficulties had been principally caused by one bank and were very different from those of Greece whose economy faced deep-seated problems.

His comments came after Taoiseach Brian Cowen and the European Commission denied a report that preparations were under way to apply for emergency funding from the EU.

Meanwhile, a Government spokesperson reiterated today that no EU bailout talks are taking place, despite reports on the BBC that preliminary talks about such a bailout are ongoing.

RTÉ News reported last night that some talks have taken place about how a bailout might happen in a theoretical worst case scenario.