Taoiseach Enda Kenny has said the Government is committed to address reservations raised by Mr Justice Brian Cregan over the commission of inquiry into IBRC.

Attorney General Máire Whelan is to brief the Cabinet tomorrow on the legal concerns that have been raised. 

Yesterday, it emerged that the Government is considering emergency legislation to deal with legal issues that have prevented the commission investigating "write-offs" as part of its probe into the activities of the IBRC.

Judge Brian Cregan, heading the inquiry, wrote to the Taoiseach last Friday stating he could not investigate any transactions involving "write-offs" because issues had arisen around confidentiality and legal privilege.

The inquiry is looking at 37 deals by Anglo Irish Bank, now Irish Bank Resolution Corporation, including the sale of Siteserv to a company owned by Denis O'Brien.

The inquiry is reportedly on the verge of collapse following an interim report by Judge Cregan.

Speaking in London during a visit to Number 10 Downing Street, Mr Kenny said the issues will be dealt with “clearly, transparently and in an absolutely accountable fashion”.

He said: "The judge has identified what he considers are deficiencies in his powers. Now I need to know what that actually means because I intend to address it.

“And in so far as a request from the Justice dealing with this, we will see based on the advice from the Attorney General what needs to be done to make that happen."

In a statement released on behalf of the directors of IBRC today, the directors and management are said to be “deeply concerned” by developments in relation to the Commission of Investigation.

The statement said the directors will "co-operate fully with the Commission. To do so, they need full and unrestricted access to all documents relating to the matters to be investigated.

"Without such full and unrestricted access, the Directors' legal right to fair process cannot be ensured."

The statement also said the directors fully accept Judge Cregan’s analysis of the reasons for the apparent impasse.

The Department of Finance said earlier that it has fully cooperated with the inquiry and continues to do so.

The department said core documents held by it and which were requested by the commission have been forwarded to it.

In a statement, that department said: "For the avoidance of doubt no redactions have been made to any documents provided by the department to the commission."

Speaking on his arrival at a Eurogroup meeting Bruseels, Minister for Finance Michael Noonan said he knew "from late Thursday night" that the IBRC commission of inquiry chairman had reservations about being able to continue the inquiry.

He said that he was given confirmation of this in the Department of Finance on Friday morning.

Mr Noonan also said he had confidence in Mr Justice Cregan and in the Attorney General.

"Of course I have absolute confidence in the Attorney General. She has been a very good Attorney General over a range of issues."

He said it had always been his view that the 2004 Act which provides for such investigations, was sufficiently robust to cover issues such as confidentiality so long as it was in the public interest.

Mr Noonan said the department had always advised, when providing documents, that the judge's powers could overrule any concerns about confidentiality and that in the public interest he could use the information as he saw fit.

"It was a matter for the judge to adjudicate, and he has adjudicated now.  He has adjudicated in a way that I didn't expect, but he has made the adjudication," he said.

Mr Noonan said the Government would seek to amend the 2004 Act in order to strengthen the public interest considerations so that the inquiry can proceed as expeditiously as possible.

"It's quite clear this causes delay, how much delay I don't know," he said.

Mr Noonan also said that because under the terms of reference of the commission, the Department of Finance was "subject" to the inquiry, his role in the issue had changed and he was not "organising" the terms of the inquiry.

He was therefore "careful" in what he said so as not to prejudice the inquiry.

He would, however, take parliamentary questions from the opposition in the Dáil on the matter.

Meanwhile, Fianna Fáil leader Micheal Martin has described the Government's setting up of the commission of investigation as "a real botched effort".

Speaking on RTÉ's Six One News, Mr Martin said that it is extraordinary that we are now only hearing of KPMG's refusal to hand over information to Judge Cregan, a month before the report was due to be presented to the Oireachtas. 

He said the latest development is very surprising and full disclosure from the Government is needed. He also said his party would support legislation to give the commission effective powers. 

Earlier, Sinn Féin’s finance spokesperson Pearse Doherty said that the Government had received an email from an individual about the IBRC probe the week before last. This was in addition to hearing about IBRC issues last Wednesday.

He said: "Claims that the Government only found out about the legal difficulties last week have no shred of credibility and are completely disingenuous.

"We have to remember that the government done all in its power to avoid establishing this inquiry and to say the Minister was not forthcoming with the information at his disposal would be an understatement.”

Analysis: David Davin-Power

The net issue appears to be not whether the judge could obtain these confidential documents but whether he could circulate them to third parties or not.

The confidentially aspect of the legislation underpinning the inquiry could possibly be addressed in emergency legislation but if issues of privilege are involved it is much more difficult.

One way out of this morass would be for a protocol to be agreed for the circulation of documents but I presume this is what the judge has been trying to agree – ultimately fruitlessly – with the provisional liquidator.

The question does arise why this was not spotted earlier.

However, it is worth pointing out that this particular issue of confidentiality and privilege was not raised in the Dáil when it was debated back in June.

However, this seems to be a slightly jinxed inquiry and is already on its third judge.

Crucial IBRC documents confidential and privileged

A barrister has said it is difficult to see how the judge heading up the IBRC inquiry will be able to gain access to all necessary documents.

Speaking on RTÉ’s Morning Ireland, Paul Anthony McDermott SC said the problem lies in the fact that crucial documents are both confidential and privileged.

Confidential records, which would typically include medical or banking records, can be overruled by a court order.

However, privilege is a more powerful protection and privileged documents are protected by law, the Constitution and the European Convention on Human Rights, Mr McDermott said.

When asked if Judge Cregan has the powers within the terms of the commission to override confidentiality, Mr McDermott said it appears he does not.

He said it may be a drafting problem with the Commission of Investigation Act 2004 because under Section 20 it says any witness before commission has the same privileges as any witness before the High Court.

However, he said under Section 21, witnesses can refuse to give evidence or disclose documents if they are privileged or confidential, which goes beyond the rights any one would have in a court room.

Mr McDermott said the issue with this commission appears to be that both confidential and privileged documents are the crucial documents making it difficult to form a conclusion based on the evidence available.

He said if the majority of the documents are confidential then it may be possible to draw up emergency laws to override confidentiality.

However, if the crucial documents are privileged then it will be more difficult to gain access to them and it may require a referendum to pass a law in order to do so.

Mr McDermott said it is difficult to see how access to privileged documents could be granted.