The sale process at TSB Bank is moving to the final stages but it will be one to two years before the two State-owned banks, ICC and ACC are likely to be sold, the Joint Committee on Finance and the Public Service has been told.

Mr David Doyle, an assistant secretary at the Department of Finance, said any necessary legislative changes to facilitate the sale of any of the three banks will be in place in the autumn.

New legislation will also provide for establishing a new employee share option scheme (ESOP) at ACC and ICC which will give employees a 14.9 per cent stake in the banks in line with Government policy.

Given the sensitivity of the TSB sale process, Mr Doyle refused to name the bidders involved in negotiations with TSB. There is believed to be three groups, Irish Life & Permanent, AIB and an overseas telecommunications company which has proposed a joint-venture with the bank.

The three bidders have been invited to submit final proposals on their plans for the bank shortly. The bank's trustees indicated to staff this week that they hope to reach a decision on the successful bidder by September.

Mr Doyle said the trustees have been directed by the Minister for Finance, Mr McCreevy, to handle the process in an open and transparent manner. "It will be a matter for the trustees to evaluate the proposals and make a recommendation to the Minister and must be sanctioned by the Cabinet," he said. The Minister still retains the right to put ICC and ACC Bank back on the market, the committee was told. In the past few weeks, ICC has submitted a strategic plan for growing its business to the Department of Finance and will begin discussions on the options on its future ownership over the coming months. Mr McCreevy has recently approved a new ESOP for staff at ICC who are now being asked to vote on it.

ACC has also started to implement a new business plan which refocuses its activities on lending and the distribution of financial products and aims to significantly reduce its cost base.