Britain has paid the first instalment of its £3.25 billion (€3.72 billion) bailout loan to Ireland, Treasury minister Mark Hoban said.

The government disbursed £403.3 million on October 14th, Mr Hoban said in a statement to Parliament in London today. The loan matures in 2019 and carries an interest rate of 4.667 per cent.

The UK's commitment to aid Ireland with a direct loan at a time when Britain is undergoing deep spending cuts stirred opposition among some ruling Conservative Party politicians.

In July, the government took the decision to cut the rate of interest on loan, with British chancellor George Osborne insisted easing the pressure on the struggling country was in the UK's "national interest".

Bloomberg