The Government has been accused of abandoning its promise to impose losses on senior bondholders in Anglo Irish Bank after Minister for Finance Michael Noonan said pursuing the policy may not be worth the risk.
Around €3bn worth of senior unguaranteed unsecured debt remains but after meeting ECB chief Jean Claude Trichet at the EcoFin gathering in Poland Minister Noonan conceded that any savings may be as little as €100m.
He said the risk to Ireland's reputation along with the implacable attitude of the EU authorities means it may not be worth pursuing as a result.
Sinn Féin slammed the move as a smack in the face to taxpayers and said as a result of the decision €700m of taxpayers' money will be paid out to an unsecured, unguaranteed senior bondholder in Anglo Irish Bank on 2 November.
Fianna Fáil said Fine Gael had backed down from its pre-election promise and accused the two governing parties of misleading the Irish public.
At the EcoFin meeting Minister Noonan spoke with Mr Trichet for around 30 minutes, where the ECB chief restated his blanket opposition to the idea of burning bondholders.
The government now says it is concentrating on getting concessions on the cost of recapitalising Anglo Irish Bank and Irish Nationwide.
They say the promissory notes used to put money in are very expensive and they want an interest rate reduction or an extension of the term.