THE Government looks set to continue to oppose lobbying by the Irish Nationwide Building Society for a change in the legislation governing the flotation of societies on the stock exchange.

The Department of Finance and the Department of the Environment have both indicated they will not support any amendment to the current legislation that would allow building societies to sell off large blocks of their shares after a flotation.

The Minister of State for Finance, Ms Avril Doyle, said yesterday that the Government was not convinced that such a move was in the best interests of Irish householders or the mortgage market.

Ms Doyle spoke out against joint Fianna Fail/Progressive Democrat amendments to the Central Bank Bill proposed for discussion at a Dail Committee yesterday. The amendments, which, if accepted, could clear the way for a society to enter a joint venture or to agree a takeover shortly after its flotation, were withdrawn, but will be presented again to the Dail over the next two weeks.

The amendments proposed by Fianna Fail deputy, Mr Charlie McCreevy, and Progressive Democrats deputy, Mr Michael McDowell, call for a society to be allowed to sell more than 15 per cent and up to 100 per cent of its shares to any one person, if it has been approved by its board of directors. Under the amendments, the Central Bank would have the discretion to override this, in certain circumstances.

Irish Nationwide managing director Mr Michael Fingleton has been making representations to the Government to overturn part of the current legislation which prevents a building society from selling more than 15 per cent of its shares, or agreeing a takeover for five years after its flotation.

Mr Fingleton has denied that the society is close to taking a decision to become a public company or that he is negotiating a possible merger with another institution.

The only previous flotation of a building society in Ireland - the Irish Permanent - led to payments to members and also substantial gains for senior management, who benefited from share options given at the flotation price.

Yesterday, Mr Fingleton insisted that his discussions with Government departments were part of the society's efforts to keep its options open.

"I have been looking for this change in the legislation for the past five years. I wasn't talking to anyone then and I'm not talking to anyone now.

Mr Fingleton is arguing that the current legislation is unjust to building societies.

But the EBS is understood to have strenuously opposed any changes and warned that it could undermine, the mutual status of the remaining societies.