The Irish Government has confirmed plans to liquidise the former Anglo Irish Bank in a deal with European chiefs to ease its 28 billion euro (£24 billion) toxic bank debt burden.
Finance Minister Michael Noonan introduced emergency legislation in Dublin just after midnight to cut the immediate cost of the nationalisation of the rogue lender - now known as the Irish Bank Resolution Corporation (IBRC) - following negotiations with the European Central Bank (ECB) in Frankfurt.
"Once the legislation is passed, joint special liquidators will be appointed to IBRC with immediate effect to wind up its business and operations," Mr Noonan said.
The IBRC has assets worth 12 billion euro (£10.3 billion), the Government said. Mr Noonan warned that not dealing with the issue could result in potential liabilities of up to 40 billion euro (£34.5 billion) for the country.
The Government was forced to announce the liquidation plan in emergency legislation with European money markets closed amid fears existing bondholders in the defunct bank would cut and run.
Irish Prime Minister Enda Kenny urged politicians to accept the bill or risk costing the state in the region of 40 billion euro in liabilities.
The scheme has been designed alongside a plan to replace existing promissory notes - high interest IOUs worth 28 billion euro to fund the former Anglo - replaced with several long-term government bonds.
Patrick Honohan, governor of the Central Bank of Ireland, was leading negotiations on that front with counterparts from the European Central Bank (ECB) in Frankfurt.
The board of the Irish Bank Resolution Corporation (IBRC), the rebranded Anglo, has been stood down by the Government as part of the plan. IBRC deposit holders and bondholders will be repaid, Mr Noonan said.
It will cease to exist after July 1 and all contracts for the 800-plus IBRC employees will be terminated with immediate effect. But the majority of workers will be retained by the state's bad-bank, the National Assets Management Agency (Nama) - set up to repair the balance sheets of the country's main banks by removing big stake property loans.