The EIB last night appealed to the Government to put forward an alternative candidate for the position of vice-president of the EIB as quickly as possible.
The bank said it expected a suitable candidate who was "absolutely unquestionable" professionally and personally qualified.
A spokesman said the position had been vacant since July 1st and while the matter was not yet urgent it was "serious".
"We would like to have a name for consideration soon," a spokesman said.
Asked if the appointment of Mr O'Flaherty would have been in the best interests of the bank, the spokesman said the fact that there was not a majority support for him was "a sign". He agreed a number of the bank's directors had doubts about the appointment. The spokesman said about six directors had returned their votes and indicated they did not all vote in favour. He said the O'Flaherty controversy was unprecedented for the bank, which never had such public debate over a nominee.
"We felt more and more uncomfortable in these last weeks to see that the summer was ending and still the Irish post was not filled or not likely to be filled in a short time," he said.
The EIB was officially informed yesterday that Mr O'Flaherty had withdrawn his name. If the Government puts forward a candidate in the next week it is likely the EIB would put in place a written vote procedure.
However, if a name is not forthcoming that quickly, it is likely the matter will be left for discussion at the next full meeting of EIB directors in Luxembourg on September 19th.
The bank said yesterday the O'Flaherty affair underlined the fact that the board of directors was effective in its role of "independently running the bank" and of ensuring its best interests.
The 16 Irish people who applied for the job at the height of the controversy would not be considered for the post as it was up to the Government to propose a nomination, the EIB said.
The Limerick lecturer, Mr Denis Riordan, who brought a judicial review against the Government over its decision to propose Mr O'Flaherty, said he would be applying this week to the EIB for the job.
The EIB spokesman said the controversy had no financial or business repercussions for the bank. The matter received minimal press coverage outside Ireland.
News that the nomination had been withdrawn was greeted with relief by senior EIB management who had been angered at the controversy and the negative publicity.
The EIB spokesman said it was open to Ireland to skip its turn to take up the post, which is rotated between Denmark and Greece.