Sir, - Bill Murdoch's article ("TSB depositors badly treated", December 11th) is to be welcomed and it is hoped it will open up an informed public debate on the sale of the TSB to Irish Life and Permanent. With the exception of this article, the press and radio coverage of this sale was very sloppy, referring to both ICC and the TSB as a "State banks". ICC is indeed a state bank - the State set it up, provided the capital, held the shares, took the risks. The Government is, therefore, perfectly entitled to sell ICC and deal with the proceeds as it thinks fit.

The TSB, on the other hand, is a totally different institution. It is an amalgam of the old Dublin, Cork and Limerick Savings banks, was founded by and funded by depositors. The State never contributed one penny to its capital or its success.

The Trustee Savings banks were the small savers' banks as distinct from the larger commercial banks which targeted the larger investor and big business. The State recognised this and to safeguard the small depositor insisted that 80 per cent of deposits had to be lodged with the Exchequer. So the State's role was primarily a protective one.

However, the Government has now decided to sell TSB for £430 million, to reward management and staff and to pocket the major part of the proceeds. The depositors who built up this bank are being left without a penny. It is a covert nationalisation.

This is blatantly unjust. Depositors in the TSB should be treated the same as depositors in the mutual building societies and insurance companies and rewarded with either a cash payment or shares in the new amalgamated plc.

The houses of the Oireachtas will have to approve this proposal. Depositors in the TSB should lobby their public representatives to ensure that justice is done. - Yours, etc.,

Des Gilroy, Howth, Co Dublin.