The €80-€90 billion in property and land-related loans to be transferred from banks to the new National Asset Management Agency (Nama) represents all such loans on their books and not just impaired loans, Minister for Finance Brian Lenihan said.
Mr Lenihan refused to speculate on the proportion of the loans that are non-performing or impaired, or on what the Government is likely to pay for them.
He said "tough negotiations" still have to take place between the State and the banks on the matter before the loans are taken on by the newly established agency.
He said the Government has still to complete a due diligence process at AIB but has a "very good idea" of the scale of the scale of the loans involved at this stage. An assessment has also been made of loans on the books of Bank of Ireland.
However, the NTMA refused to comment on the figures involved because they are "price-sensitive".
Speaking at a press briefing at the NTMA's offices in Dublin this evening, the Minister and economist Dr Peter Bacon, who advised the Government on the matter, said the move did not amount in any sense to a "bailout" of the Irish banks.
Mr Lenihan appealed to those in public office to desist from referring to the measure in such terms.
"I really do appeal to individuals in our public life to desist from the temptation of using this bailout language whenever this subject comes up.
This is about bailing out the Irish economy. This is about ensuring that businesses and individuals who cannot access credit, can access credit. That's what this is about and that's why the Government has taken such an interest in this matter.
"Because the longer the credit system in this country remains clogged up with non-performing loans, the longer our economic crisis will prolong itself with traumatic impacts on jobs in this economy. That's fundamental.
The Government has no particular love of the banking system or any other system but Irish Governments have always intervened when markets failed, [whether it's] credit or electricity or turf production or alcohol production and we make no apology for intervening in this area, which is at the heart of the financial system of the State."
Mr Bacon said the move involved the shareholders of the banks taking "considerable pain".
"We are cleaning the balance sheets of the organisations to ensure the institutions can resume their proper role as motors of credit in the Irish economy."
Mr Lenihan said he believed the banks would work with the State on the matter, but that if legislation was required, it would be enacted.
He said the Government made no apology for intervening in the banking system in the manner it has and that this was necessary to maintain confidence in the Irish banking system and to maintain jobs.
All of this depended on a functioning credit system, Mr Lenihan said.
"These goals are linked."
Mr Bacon said he had considered an alternative approach to dealing with bad loans in the banks, which would have involved a system of risk insurance.
However, he ruled this out as it would, in Irish terms, have amounted to a "substantial bailout of shareholders and borrowing clients" at the expense of the economy.
"This approach avoids contingent liabilities which squares up to the losses that are there," he said.
Minister for Finance Brian Lenihan announced the plan to create the Nama in yesterday’s Budget. Under the plan the Nama will buy between €80 billion and €90 billion of property and development loans from the banks in a bid to kick-start lending and repair the banking system.
Separately, NTMA chief executive Michael Somers dismissed "off-the-wall" speculation about the State's overall indebtedness and said it was of the order of 20 per cent of GNP and not the "extraordinary" figures that had been mentioned in some reports.
At the end of last year, the State's total gross debt was about €70 billion and it had about €20 billion in cash.
In respect of this year, the position was that €25 billion had to be found in total, of which €5 billion related to a bond falling due for repayment this month.
Mr Somers said the NTMA had already succeeded in raising medium- to long-term funding of €11.3 billion, despite the current difficult conditions in global markets.
Later, the Minister for Communicatins Eamon Ryan told the Dáil that about one-third of the property covered by the Government’s purchase of bank loans was foreign-based.
Mr Ryan said that roughly one-third was held outside the Republic but half of it would be in Northern Ireland.
“If we take the island of Ireland as our measure of home or abroad, roughly 15 per cent to 20 per cent, depending on the institution, is held outside the country, primarily in London, New York and in other cities in the United States,’’ he added.