The former head of supervision at the Central Bank, Mr William Slattery, has reiterated his recent warnings about the danger of negative equity for house owners if house prices collapse.

Negative equity is "an absolute certainty" if the current levels of growth in personal borrowing continue, he warned.

Speaking on the TV3 Agenda programme yesterday, Mr Slattery called for "a sense of emergency" about the rate of growth in private sector debt. "In the UK in 1989 at the peak of its crisis, borrowing was growing at 16 per cent. Here, credit growth is at 27 per cent and accelerating. . . It cannot continue," he warned.

Mr Slattery called for "definitive actions" to be taken by all the players involved including the banks, the local authorities, An Bord Pleanala and the Government.

"It is clear that the monetary conditions are out of control. There's a potential financial crisis on the horizon if this situation continues. It's very serious indeed," he said. The Irish house-buyer was in a "crucifying dilemma", he contended.

"On the one hand he knows in his heart that there is a danger of a house price collapse in the future, but, on the other hand, he can't predict what is going to happen in the future.

"So the house-buyer is faced with a horrible dilemma, but there is no way these conditions are sustainable."