The chairman of the Public Accounts Committee has said legislation to set up an inquiry into the bank guarantee will be too complex and will inevitably end up in the courts.

John McGuinness of Fianna Fáil said the PAC had been briefed by the Department of Public Expenditure and Reform as to the outline of any legislation.

He was concerned, he said, that it could reduce the impact of investigations by Oireachtas committees and reduce the effectiveness of the PAC.

He said it also flew in the face of the electorate's decision to reject the Oireachtas inquiries referendum in 2011.

Mr McGuinness said it would be far simpler to have an "inquire, record, report" model which had already been suggested by the PAC.

The Department of Public Expenditure and Reform earlier confirmed that legislation for an inquiry into the banking guarantee would be brought forward over the next two weeks.

A spokesman said Minister for Public Expenditure and Reform Brendan Howlin would present a bill shortly, but it was for the houses of the Oireachtas to decide which committee would hold an inquiry.

The Sunday Business Post has reported that the inquiry will be able to summon witnesses and produce a report.

The paper says that senior figures on the night of the guarantee such as former taoiseach Brian Cowen and former central bank governor John Hurley will be called to give evidence.