Minister for Finance Michael Noonan has said his primary aim is to find an alternative to the promissory note which would be less onerous on the taxpayer.

To that end, the Minister said, he was proceeding on the basis that the €3.1 billion payment to the IBRC, or Anglo Irish Bank as it was formerly known, could be settled with the payment of "long term Government bond of fair value."

He said that discussions were continuing with the European Central Bank and he had not been expecting a statement from the ECB at the conclusion of the Governing Council meeting.

Mr Noonan, responding to questions from Fianna Fáil finance spokesman Michael McGrath, TD, said ''what happens at the end of the month is not the end of it" and said there would be further talks on an overall settlement on a "less onerous" deal on banking debt for the taxpayer.

Sources have told RTÉ News the key issue is ensuring the that the bonds paid to Anglo would not fall in value below the value of cash.

Negotiations are centred on ensuring Ireland does find itself in a technical default. In theory the Department of Finance can make the payment to Anglo without the permission of the ECB. However, a key issue is ensuring a payment by way of bond is legal.

A spokesman for the Department of Finance said it would not be commenting further until all the details regarding a deal were worked out. That could happen in the coming days.

The Minister for Finance announced in the Dáil last night that a new Government plan to avoid paying €3.1 billion due at the end of this month is to be put to the European Central Bank today.

Under the plan, instead of making the payment, the State will issue a bond which would not have to be repaid until 2025.