Finance Minister Michael Noonan has insisted that taxpayers will not have to stump up more money to inject into Irish Life & Permanent in the wake of the collapse of the sale of its life assurance arm.
Mr Noonan said Irish Life was a successful, profitable company which the Government would now run and sell at some time in the future.
He said the asset was still very valuable, and that - unlike other banks - extra capital injected was not lost money.
Mr Noonan said the arrangements with Europe were that the recapitalisation would happen before the end of the year and the proceeds of the sale of Irish Life would come very close to covering it.
The State will now have to put in the €1.3 billion in capital needed, but the Minister said this had already been accounted for in the Budget.
The Minster said the sale to the preferred bidder of Canada Life was at the final stages but the potential buyer pulled out because of the euro zone crisis.
Fianna Fáil finance spokesman Michael McGrath called the news of the collapse in the sale of Irish Life "disappointing". But he said Irish Life was a profitable business and the Government's priority should be to protect that business until market conditions improved to ensure a return to the taxpayer.
Sinn Féin TD Aengus Ó Snodaigh called on Mr Noonan to come into the Dáil next week to explain what he called the full scale of the problem at Irish Life.
