The final price set for Telecom shares and the allocation to shareholders were reached only after intense and sometimes difficult negotiations. Merrill Lynch, the US investment bank, argued strongly in the late stage of talks for a high price and found some support from the Minister for Finance, Mr McCreevy, and his officials.

The Minister for Public Enterprise, Ms O'Rourke, favoured a lower price - to maximise the gain to the private investor. The Government's other adviser, AIB Capital Markets, is also believed to have recommended a less aggressive pricing strategy. The company, finally, would also have preferred a somewhat lower price, as the price that was struck leaves it trading at a premium to most of the other main European telecom companies.

The final decision was taken by a meeting of the Cabinet subcommittee - including Mr McCreevy, Ms O'Rourke and the Tanaiste, Ms Harney - early on Tuesday evening. It was effectively a compromise price between the sub-£3 figure favoured by Ms O'Rourke and the company and a more aggressive price of £3.20 or upwards favoured by Merrills.

Politically, the balance was between striking a price high enough not to leave the Government open to the accusation that it was selling too cheaply and low enough to allow a reasonable rise when trading starts. The crunch issue now is whether the gains expected in today's trading can hold until the bulk of private investors can trade in the second half of next week.

Discussions on the allocations to shareholders continued late into Tuesday night. Ms O'Rourke is thought to have insisted on the larger allocation to retail shareholders, who are to receive 55 per cent of the issued shares.