Taoiseach Enda Kenny has said the banks are to outline cost-cutting plans within two weeks, which will include a "substantial contribution" from the leadership of the banks.

Mr Kenny was responding to Opposition criticism of the decision by Minister for Finance Michael Noonan to abstain in the vote on the remuneration package for Bank Of Ireland Chief Executive Richie Boucher.

Speaking in the Dáil, Mr Kenny said Minister Noonan had put in place a process of pay scales and pension packages, which had been reported to Government by Mercer.

Responding to criticism, Mr Kenny said: "I'd remind you that this incoming administration put a cap on bankers' salaries and nobody has breached that since.

"I’d remind you that the Government as part of the Programme for Government asked that an analysis would be carried out on the basis of bankers’ pay.

"That was conducted by Mercer, was reported to Government and Government made its recommendations in engaging with the banks for a reduction in pay and pension scales between 6% and 10%."

He said that the minister expects to receive a response to the Mercer report within the next two weeks with a substantial contribution on pay and pensions.

Sinn Féin's Mary Lou McDonald earlier contrasted the Government's treatment of low paid public sector workers with its failure to tackle the pay of Mr Boucher.

While Independent TD Shane Ross has described Mr Boucher’s pay as outrageous and absurd.