The Government decided to immediately establish the Oireachtas banking inquiry at its Cabinet meeting this morning.

Labour TD Ciaran Lynch is being proposed by the Coalition as the chair of the inquiry, which will be set up under Oireachtas inquiries legislation.

Consultations will also take place with Opposition parties on the committee’s membership, with proposals on the inquiry to go before the Dáil next week.

Coalition sources said the membership committee will be less than ten, and it is understood it will be comprised of both TDs and senators.

The inquiry was directly discussed by Taoiseach Enda Kenny and Tánaiste Eamon Gilmore before agreement was arrived at by the Cabinet.

Speaking this afternoon, Minister for Public Expenditure Brendan Howlin said it could be expected that public hearings could begin later this year. He also said the inquiry will have the same powers of compellability as the High Court.

A statement released after today’s Cabinet meeting said the “Taoiseach and the Tánaiste are proposing, on behalf of the Fine Gael and Labour parties, that the Oireachtas banking inquiry would be established immediately”.

“It is proposed that:

the inquiry be conducted under the Government’s recently enacted Oireachtas inquiries legislation;

that it be carried out by a dedicated Joint Oireachtas Committee to be established for that purpose;

that the Committee would be chaired by Deputy Ciaran Lynch.”

“As the establishment of the inquiry is a matter for the Oireachtas, the Government Chief Whip will now commence consultation with the other political parties on the proposed inquiry.

The Government plans to bring a motion to establish the inquiry will be brought before the Oireachtas next Tuesday.

Asked prior to the Cabinet meeting about the implications for the inquiry of criticisms of the regulator by the Anglo trial judge Martin Nolan during yesterday's sentencing hearing, Mr Howlin said:

“I certainly take very strong note of what the judge said. Somebody who has sat through every line of evidence, every word of evidence given over a protracted period it has to be taken note of and I think now the inquiry is imminent.”

Mr Howlin said the legal framework he had introduced had been accepted by Dáil and Seanad by formal vote.

He said the “actual establishment of the inquiry is imminent and I think after yesterday’s commentary in court the role of oversight of the banking system and the decisions that were made will form a very significant part of that inquiry”.

Asked about progress on the inquiry Mr Howlin said: “Obviously people were Mr Howlin said the Oireachtas was had to be careful to avoid any contamination of the courts procedures.

“There is a compelling demand from the public to know what happened and I think there are a lot of unanswered questions that have emerged from the court proceedings that should be answered by those directly responsible.”

The Minister also said while not all those centrally involved in the banking collapse were “available in the State” those that are should be certainly called to give clear, transparent and public evidence.