An investigation focusing solely on the sale of Siteserv to businessman Denis O’Brien, which involved a €150 million debt write-off by the Irish Bank Resolution Corporation (IBRC), could be finished by the end of next year, Taoiseach Enda Kenny has told Opposition leaders. However he said the legal changes necessary for even such a restricted inquiry would still be complicated and filled with risk.

The Government earlier this year asked Mr Justice Brian Cregan to investigate 38 Irish Bank Resolution Corporation (IBRC) transactions involving write-offs of more than €10 million each. But major problems with this inquiry have led the Taoiseach to suggest a more limited investigation.

In a letter to Opposition leaders, Mr Kenny warned that a limited Sitserv inquiry would “only be feasible” if the Commission of Investigation headed by Mr Justice Cregan was given a new legal basis to ensure it could examine confidential banking files. But he said such an action could have “consequences for the other ongoing commissions which have to be carefully assessed”.

Meanwhile, the Oireachtas would have to pass changes to existing legislation to ensure that Mr Justice Cregan could have access to Stock Exchange information “albeit with no guarantee of its ultimate effectiveness”.

Minister for Finance Michael Noonan would have to be given powers to direct Siteserv’s special liquidator to waive legal privilege “with uncertain consequences for the taxpayer if such a power were to be exercised and subsequently successfully challenged”.

Following his recent report that he did not have enough powers to carry out the inquiry sought by the Government into IBRC transactions, Mr Justice Cregan said the investigation into all 38 IBRC transactions involving write-offs of more that €10 million each would take “several years”. He proposed prioritising a number of transactions that led to the largest write-offs, which he said could be completed in less than two years. The total value of the write-offs of all 38 transactions is €1.9 billon.

The Taoiseach’s letter raises serious questions over the Government’s ability to get legislation passed by the Oireachtas before the Christmas recess, which means the inquiry could, for now, have run into the sand.

“A number of significant risks remains, while choices will be required in relation to the scope of the commission’s work in order to ensure as early a report as possible, and to minimise financial costs and risks,” wrote Mr Kenny, adding that he believed it would be “beneficial to secure the greatest possible degree of consensus”.

The questions raised by Mr Justice Cregan could be sent to the High Court “to obtain clarity in the public interest”, Mr Kenny wrote, although this seemed “unlikely to lead to a satisfactory resolution of all of the issues”.

The commission could be given the powers of the High Court, he acknowledged, but “the allocation of such powers risks moving the process closer to that of a tribunal and removing some of the flexibility and informality that has worked well to date”.