ABOUT ONE-third of the property covered by the Government’s purchase of bank loans is outside the State, Minister for Communications Éamon Ryan told the Dáil.

Mr Ryan said that roughly a 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.

Earlier, Taoiseach Brian Cowen defended the Government’s decision during heated Dáil exchanges.

Mr Cowen said the estimate of €80-€90 billion for the cost involved was “book value” drawn up following work by the National Treasury Management Agency, the Department of Finance and advisory bodies.

“If we are to maintain jobs and get back to the functioning economy we all want to see, there must be a functioning banking system,” said Mr Cowen.

He added that there was an “overhang” in the banking system.

The leader of the Labour Party Eamon Gilmore said that as he understood it, the plan was that the Government would use bonds to take off the hands of property and development speculators “the half-finished apartment blocks we see everywhere, the empty hotels and office blocks and the land that was bought at exorbitant prices on borrowed money from the banks”.

Mr Gilmore claimed that as well as property in the Republic, the Government intended to buy back the property on which they speculated abroad, including the “shopping centre in Birmingham, the apartment blocks in Bulgaria, the hotels in Dubai and the retirement villages in Florida”.

He accused the Government of protecting friends who had brought down the Irish economy. Some of those friends had been investing and dabbling in property abroad, he said.

Rounding on Mr Gilmore, the Taoiseach said he held no brief for any individual, inside or outside the House.

“I regard with contempt the continuing innuendo that you are very quick at throwing around . . .” he said.

“I know what your game is . . . your political tactic. It is a game . . . you are playing a very serious game with Ireland’s reputation.”

Mr Cowen said the question of the categories and classes of assets was work that would be undertaken by the National Asset Management Agency (Nama) upon its establishment.

“What we had yesterday was a policy announcement,” the Taoiseach said.

Fine Gael leader Enda Kenny said: “I asked the Taoiseach a straight question: how much does he propose to take from the taxpayer to bail out the banks for dealings on what amount to dodgy developer debts?”

Mr Kenny said they were being asked to give another blank cheque to Fianna Fáil to bail out the banks.

“Only the banks are happy this morning,” he added.

Later during the resumed Budget debate, Mr Cowen said the National Asset Management Agency would purchase the assets through the issue to the banks of Government bonds.

“The amount paid by Nama will be significantly less than the book value to take account of the Nama estimation of the worth of the loans and to compensate the State for taking on these risks, and the banks will have to take the associated losses,” he added.

“Should losses be incurred by the agency over a 10-to-15-year timeframe, the Government intends that a levy should be applied to recoup any shortfall.”

All borrowers would be required to meet their obligations, he said.