The Attorney General is to advise on whether Ireland needs a referendum after the overnight deal at the European summit, Taoiseach Enda Kenny told reporters at the end of the Brussels summit.

Up to 26 member states could take part in the new Fiscal Stability Union, in which countries would submit to much deeper fiscal discipline and broader co-ordination of economic policies.

Mr Kenny would not be drawn on how long the process would take or whether he thought the Government would win such a referendum.

The new arrangements were agreed in the early hours of this morning at a summit of EU leaders, which Mr Kenny described as "exhausting".

He also confirmed that the Government would introduce a fiscal responsibility law next spring, which would be in keeping with the new Golden Rule on fiscal discipline to be enshrined in the new arrangements.

Mr Kenny said the meeting had increased the firewall opportunities to prevent contagion from the Greek debt crisis from spreading to bigger economies like Italy and Spain.

He welcomed the decision to bring forward the permanent EU bailout mechanism, the European Stability Mechanism (ESM), which will replace the existing bailout fund the European Financial Stability Facility (EFSF).

The Taoiseach said the decision to withdraw any reference to private creditors suffering future haircuts under the ESM treaty as positive, since it would encourage such creditors to lend to Ireland in 2013, when the Government hopes to return to borrow on the open markets.

Mr Kenny said leaders had agreed last night to lend €200bn to the IMF, which could in turn be used to help countries in difficulty.

He said Ireland would not be required to contribute to that amount, although he confirmed that the Government would be contributing €250m to the new ESM fund, as originally agreed.

This would not affect Ireland's budget deficit, he said.

The Taoiseach said he also made a strong case for Ireland to be given some support in reducing the cost of the bank recapitalisation, which took place before the country entered the bailout programme.

Mr Kenny said the cost of bailing out banks was €63bn which, he said, had to be paid back at much higher rates than had been agreed under the revamped EFSF mechanism.

Ireland's decision to recapitalise banks at the time had prevented contagion spreading to Europe, he said. He said his counterparts had acknowledged this fact.

Mr Kenny said the decision by the UK to remain outside the new intergovernmental arrangements would not affect Ireland's International Financial Services Centre (IFSC).

When asked if the new arrangements could see a move by other members such as France to harmonise corporate tax systems, he repeated that Ireland's corporate tax rate had been secured and that guarantees to that effect from 26 other member states were legally binding.

United Kingdom isolated after summit

The meeting will be remembered for a large majority of countries agreeing to forge ahead with a separate treaty, leaving Britain isolated.

It is understood 23 of the 27 leaders agreed to pursue tighter integration with stricter budget rules.

They are the 17 eurozone members and six other countries outside the eurozone.

Sweden, Hungary and the Czech Republic said they needed to consult their parliaments, but Hungary later said it was minded to agree to the move.

However, the UK said it could not accept the proposed amendments, after failing to secure concessions on protecting its financial services.

It leaves the UK isolated in Europe like never before and its ability to influence EU policy is now in question.

The division was framed by ten hours of difficult talks last night. And despite more talks today, the division remains over the new fiscal plan.

The plan is for governments to insert in their constitutions or national law a 'Golden Rule' to achieve a balanced budget.

Countries that breach the 3% budget deficit rule will face automatic sanctions, unless a majority of the eurozone members say otherwise.

A country in repeated breach could see the European Commission take a much more intrusive role in reviewing budgetary decisions before they are agreed by national parliaments.