The Taoiseach sharply criticised Mr Charles Haughey and Mr Michael Lowry during the debate on the McCracken tribunal report, describing its findings relating to them as "extremely disturbing".

Mr Ahern said it was unacceptable that people who had held high office and enjoyed a high degree of public trust should give evidence that was "unacceptable and untrue" or deliberately conceal vital information from the House or from a tribunal set up by the House. "There is no excuse for this," he added.

In the case of Mr Haughey, it was also unacceptable that full co-operation was withheld from the tribunal, forcing it to undertake lengthy, painstaking and costly research to establish facts which could have been established almost at once with his full co-operation.

"It is unacceptable that in a manner hitherto concealed from the public, a Taoiseach should be personally supported to the tune of £1.3 million. It is appalling that any businessman should be able to believe, even if wrongly, that he could in any sense `buy' the Taoiseach, or that he might have him in his pocket if he ever needed him.

"By accepting such favours, Mr Haughey thereby laid himself open to the possibility `that political or financial favours could be sought in return for such gifts, or even be given without being sought', even though thankfully this did not occur. As the tribunal has said, `if such gifts were to be permissible, the potential for bribery and corruption would be enormous'."

For Mr Lowry to have availed of the tax amnesty, while politically condemning it and flouting its obligations, was particularly reprehensible, Mr Ahern said. Paying tax was not something just for "the little people" and no one, however eminent, was above the law.

"The disgrace now being suffered by a former Taoiseach and a former minister should be a solemn warning to any aspiring deputy or any other elected representative to stick to the rules that we make and that others are required to abide by.

"I accept the criticism that too permissive a culture has been allowed to grow up, particularly over the last 30 years. While some may have been more outspoken in pointing to the dangers than others, can any party point to an entirely blameless record?"

He said he naturally regretted the damage to the reputations of those most directly concerned. Mr Lowry had done much good work for his constituency in North Tipperary, for which, despite everything else, they were still grateful, and some good work as an officeholder. But as a new minister he had made the fatal mistake of preaching to others about cleaning out "cosy cartels" and implying that innocent third parties were in some way guilty of improper behaviour. "Keeping offshore accounts, except where they are necessary or convenient for legitimate transactions abroad, are not my idea of patriotism or public duty," Mr Ahern added. "The question does arise as to what standards we expect of those who sit in this House, and whether the House has adequate sanctions in respect of unacceptable behaviour. We may need to put in place, on an all-party basis, tighter rules for continued membership of this House."

The record of Charles Haughey was well-known, said Mr Ahern. "Parts of it, independent of anything related to this report, will always be controversial. But in many important areas, valuable service by someone of immense ability will be recalled. For the positive things that he did he will always be held in high regard by very many people." But, said Mr Ahern, nobody in the House would disagree with the verdict of the tribunal that by allowing himself to be put in a position of dependency, Mr Haughey had devalued some of the undoubtedly valuable work which he did when in office.

"It is inevitable, unfortunately, that his real achievements will now be seen or set off against what we have learned from the tribunal. I personally find that very sad for an individual that many of us know well and have honoured and admired.

"Nor is it just sad for the party he led or for his former colleagues in government, who sought to serve the public under his leader ship. It is sad for our democracy and our nation, that a leader who, after Lemass, put more of his stamp on the Ireland of the second half of the 20th century than possibly anyone else should have demeaned himself and political life by accepting such huge sums of money for his personal benefit from Ben Dunne."

There were some, said Mr Ahern, who would like to damn the entire Fianna Fail party by association and all the numerous honest and public-spirited members who were proud to belong to the organisation. But he was no more responsible for the misdemeanours of Charles Haughey than deputies John Bruton, Dick Spring and Proinsias De Rossa were responsible for the misdemeanours of their colleague in government, Deputy Michael Lowry, or would be for any other colleague who departed from politically acceptable norms of behaviour.

"The question will be asked: why were we not more aware that something was untoward? In most walks of life, particularly with colleagues who have made a substantial income previously from a successful business or professional partnership, we respect their privacy and do not pry into their personal financial circumstances. Perhaps we were at fault for not asking more questions, though that is never an easy thing to do, given our instinctive respect for each other's privacy.

"That charge is levelled primarily against Fianna Fail, even though Charles Haughey's leadership was more contested than any other's.

In the state of knowledge that we then had, his strong points had to be weighed against known flaws, and honourable people took different sides of the argument, and in that there was no conduct unbecoming. "But one could equally ask: did Deputy Lowry's senior colleagues or his leader never wonder at his facility in procuring substantial contributions both for the party and for themselves individually from Ben Dunne? Generally, it is easy to be wise in hindsight."

Mr Ahern said it would be right for him to pay tribute to those in the media who exposed the state of affairs brought before the tribunal or who previously questioned it. "The fourth estate - freedom of the press - is vital to democracy."

On the party leader's allowance during Fianna Fail's period in opposition, he said he was quite satisfied, having spoken to the person who administered the account, that it was used for bonafide party purposes, that the cheques were prepared by that person and countersigned by another senior party member. There was no surplus and no misappropriation.

The Fine Gael leader, Mr John Bruton, repeated his call to Mr Michael Lowry to resign his Dail seat. "I have already made my view of his position clear in public. In his own and his constituents' interests, Deputy Lowry should not continue as a member of this House while he has so many personal financial issues to resolve."

He added that there was a widespread perception among people that many of those in business used under-the-counter payments, offshore accounts and contradeals of all kinds in the black economy as a way of evading tax. The McCracken tribunal report had found that Mr Haughey and Mr Lowry had also availed of such methods to evade tax.

"They, like others who abuse our system and ignore the laws of the land, must face the consequences of their actions. That can, and must, be done by due process, without hindrance or pressure from politics. Non-politicians who used such methods to hide money should be pursued with equal vigour."

It had come as no surprise to anyone that Mr Haughey required large sums of money to maintain his visibly lavish lifestyle, least of all those associates of his who would have had occasion to visit his home over the years where he had done much government business.

Some journalists and politicians did try unsuccessfully to force Mr Haughey to disclose the sources of his wealth down through the years, said Mr Bruton. "Serious questions were treated with derision. Mr Haughey always seemed to have a willing band around him, ready to crease their faces with derisive laughter when he treated serious questions from the press with contempt. Some of those faces are still visible on the front bench opposite."

Mr Bruton said there would have to be a reopening of the question of how £500 million in export credit insurance was granted to Goodman companies against the expressed advice of senior departmental officials and advisers. There must also be a reopening of Mr Haughey's direct involvement in the £25 million loans made available by the IDA to Mr Larry Goodman and his company.

So, too, would the sale of Carysfort College to UCD have to be re-examined. "It defies belief that Mr Pino Harris could make a £1 million profit on the turnaround in the purchase and sale of this prime site without Mr Haughey himself and the government having applied pressure on the education authorities in UCD to purchase this property."

Mr Bruton said it should be made clear that the law against corruption covered decisions taken by TDs in the Dail itself

It was impossible to escape the conclusion that every single person who invested in the Ansbacher accounts was knowingly involved in a highly orchestrated and well organised tax scam, the Labour leader, Mr Dick Spring, told the Dail. There was absolutely no reason why these people should be exempt from scrutiny and disclosure, he said.

Mr Spring said a difficulty with the proposed terms of reference for the new tribunal of inquiry was that they would not enable the tribunal to get at the source of the Ansbacher accounts without first establishing that any monies there were for the benefit of Mr Charles Haughey or other ministers. "To put it bluntly, people who had money salted away in the Ansbacher accounts for commonor-garden illegal purposes may well be immune under these terms," he said.

He had tabled an amendment which, he believed, would have the effect of opening up the Ansbacher accounts to a much fuller scrutiny than was at present envisaged. He urged the Government to reconsider its position in the matter and warned he would insist on a vote on this amendment if necessary.

Mr Spring also urged the Government to review whatever perks were currently in place "to ensure Mr Haughey's comfort" as former Taoiseach.

Mr Haughey had engaged in wholesale lies and deliberate tax evasion. He had been holder of the most important office in this country and had dishonoured it. "There is an onus on the Government, and especially on his party leader, to take steps immediately to prepare and outline the political sanctions necessary."

Mr Justice McCracken had been very clear about the unacceptability of Mr Haughey's behaviour, said Mr Spring. The political system must be prepared to demonstrate equally clearly that it was prepared to follow the judge's findings to their logical conclusion and apply all appropriate legal, financial and political penalties.

That meant, as well as the Government reviewing any perks in place for Mr Haughey, that the Revenue Commissioners must pursue all taxes owed and the DPP consider whether other prosecutions were warranted.

Mr Spring said that as regards Deputy Lowry, it was clear that he too had been indicted in relation to "cynical and systematic tax evasion, compounded by criminal breaches of exchange control regulations".

It was equally clear that Mr Lowry had "brazenly misled" the Dail in his detailed statement of December 19th last year, when he had failed to mention payments of more than £100,000 and referred to offshore accounts "in such a way as to imply that he had no involvement in any such things".

"Although I am aware that it is not considered appropriate to comment on personal statements made by members in this House, I doubt if any member would have been impressed by the statement made by Deputy Lowry today," he added.

Mr Spring said he had tabled another amendment to the terms of reference which would require the new tribunal to specifically examine the manner of disbursement by Mr Haughey of public monies received by him by virtue of his office as leader of Fianna Fail from 1983 to 1992.

He had said on many occasions that the House, and the public, were entitled to a detailed explanation into the way in which £1 million in party leader's allowance was used by Mr Haughey in this period. "That was taxpayers' money, meant to be used for political and parliamentary purposes only. We are told that Fianna Fail had inquired into the matter and everything is all right. I'm afraid I need a bit more convincing than that."

Mr Des O'Malley (PD, Limerick East) said the McCracken report had made plain what many for years could only harbour as suspicions: Mr Haughey was a malign influence in Irish public life.

"While it is true that there was no evidence adduced of any attempt at a direct or indirect payoff for Mr Dunne's largesse, nobody but the most naive could possibly believe that being indebted to Mr Dunne in the amount of £1.3 million did not create the circumstances in which corruption could take place."

The plain truth was, said Mr O'Malley, that the ascent of Mr Haughey to political power was in large measure by questionable means. "Many people were secret victims of his ambitions; some few were his public victims."

He said he hoped that the new tribunal's powers were wide enough to enable it to look into the various serious matters that came to light in the beef tribunal report.

Mr O'Malley added that the manner in which the State team in the beef tribunal, acting on the instructions of the then Attorney General, conducted their case was disquieting. "Those who made allegations, as they were called, were treated with hostility by the State and strict proofs of everything were demanded from them. Large sums were spent by the State on public relations and economic consul tants in an effort to disprove or discredit the evidence of a Minister which did not suit the State in the guise of the personal and political interests of two successive Taoisigh, Mr Haughey and Deputy Reynolds.

"The willingness to turn an official blind eye to fraud and to huge tax evasion brings all the laws of this State into disrepute and makes ordinary compliant members of the public aggrieved and cynical about the partial manner in which some of our laws are applied, not least, as they believe it, our taxation laws."

Mr O'Malley said there was every reason to believe that the Dunne payments, although substantial, were but the visible tip of a much greater iceberg and that the true magnitude of corrupt and compromising payments was very much greater.

"Certainly, it seems unlikely that Mr Haughey, when he sent out Mr Traynor in pursuit of wealthy patrons who would bail him out of just one of his financial crises, would have recalled him from that task as soon as Ben Dunne turned up trumps, nor does it seem likely that Mr Dunne was his first benefactor.

"If Mr Haughey was prepared to compromise himself to Mr Dunne, as he was, the strong likelihood is that he would not shrink from doing so in relation to other wealthy businessmen."