ANGLO IRISH Bank may have to be wound up in the long term, but an immediate liquidation would not benefit taxpayers, according to the Minister for Finance, Brian Lenihan.

The final cost of bailing out the bank, the biggest casualty of the property bubble’s collapse, could run to €22 billion, but the Government has insisted that it will be kept as a going concern since the State took over the institution in January 2009.

Speaking to the Dáil yesterday Mr Lenihan said he accepted that a longer-term wind down of the bank is an option that must be examined.

However, he warned that an immediate liquidation of Anglo would not benefit the taxpayer. A Department of Finance source estimated yesterday that this could cost up to €70 billion.

Mr Lenihan stressed that he did not have a preferred approach to the bank’s future. “My only concern is to minimise the cost to the taxpayer of Anglo Irish Bank,” he said.

The bank’s management is currently working on a restructuring plan for the institution, and has to look at a number of options, including immediate liquidation, longer term wind down, and carving a solvent good bank out of the existing institution.

The EU Commission will ultimately have to approve any restructuring plan. The bank will have to submit its proposals to the commission before the end of next month.

The EU’s competition directorate is carrying out an inquiry into the State’s support for the institution, during which it will scrutinise whether or not winding it down will cost more than injecting further billions into keeping it going.

The commission has told the Government that any cash injected into the ailing bank must be counted as spending, and will thus go onto the State’s books as debt, a situation that the Government had hoped to avoid.

Mr Lenihan was responding to questions from Fine Gael finance spokesman, Richard Bruton, who asked if the Minister was preparing to abandon the position that Anglo should be kept as a going concern.

The Minister said the Government would continue to treat Anglo as a going concern until the EU approves a restructuring plan for the bank.

The State took over Anglo Irish Bank last year as it feared that its exposure to the collapsing property market could damage the Republic’s entire financial system.

The bank owes €15 billion to overseas bondholders, a sum that the Government has guaranteed. The State has since pumped €12 billion of taxpayers’ money into the institution. Anglo last month transferred €8.3 billion in debts loans to Nama.