The Taoiseach has told the Dáil that the Cabinet has approved the terms of reference for an inquiry into the sale of the NAMA Project Eagle loan portfolio.

Speaking to Sinn Féin President Gerry Adams, Mr Kenny said following receipt of further observations from Fianna Fáil and Mick Wallace "I took those into account and had approval given for the terms of reference of that".

The terms of reference provide for an investigation into Project Eagle, but could be amended to provide for further modules at a later stage.

The commission is to investigate if the disposal strategy, minimum price applied, and management of the sales process for its Northern Ireland loan portfolio were appropriate in the circumstances.

In addition, the commission will assess whether any conflicts of interest arising in relation to members of NAMA's Northern Ireland Advisory Committee were managed appropriately, and investigate when and how NAMA became aware of fees allegedly payable to a former member of the Northern Ireland Advisory Committee by bidders on Project Eagle.

Decisions and actions of the Minister for Finance and the Department of Finance relating to the disposal of the Northern Ireland portfolio will also be investigated.

In March the Public Accounts Committee concluded the agency's strategy regarding the sale of the loans was "seriously deficient".

The sale led to a recorded loss of £162m, while NAMA recorded losses totalling €800m in respect of its Northern Ireland loan portfolio between 2010 and 2014.

The publication of the terms of reference have been welcomed by Fianna Fáil and Sinn Féin TDs.

Fianna Fáil's Seán Fleming said the terms are in line with proposals submitted by his party, while Sinn Féin's Pearse Doherty said the Government needs to direct NAMA to cease selling assets until the commission completes its work.