Media reports seem to have established a prima-facie case that National Irish Bank was involved in the active promotion of tax-evasion schemes by the use of offshore accounts, said the Fine Gael spokesman on finance, Mr Michael Noonan.

In 1993 and 1994, the bank had accounts of a peculiar nature in branches throughout the State; some were supposedly non-resident accounts, others were in bogus names, and all seemed to contain money hidden from the Revenue Commissioners, he said.

"NIB had a system in place to highlight these accounts and readily identify the beneficiary. If, for example, a depositor in one of these accounts applied for a loan, this centralised system highlighted the fact that he also had another hidden account and the true credit position was easily established.

"Nothing hinges on this other than the fact that the central management of the bank had a system in place which readily identified these account-holders, and when they wished to approach them to sell a particular financial product to them, it was a simple matter to identify their names and addresses and send the bank's staff to visit them.

"It is relevant that these accounts existed after the tax amnesty, and after the granting of very strenuous powers to the Revenue Commissioners by the House of the Oireachtas which included among other things the `whistle blowers charter'.

"About eight months ago, after the closure date for declaration of money under the amnesty, someone at National Irish Bank decided that the money in the accounts I have described was no longer safe from the Revenue Commissioners. An ingenious scheme was organised. Sales executives of the bank were dispatched to visit the deposit-holders. These sales executives were extremely successful and encouraged approximately 188 depositors to invest a total of £30 million in the ingenious scheme.

"Depositors were asked to transfer their money into bank drafts drawn to the benefit of Clerical and Medical International [CMI] based in the Isle of Man. The money was transferred back to the bank branches of origin immediately, and was deposited in the name of CMI with a number to identify the identity of the original deposit-holder.

"Subsequently, the deposits seem to have been centralised, but the essentials of the scheme remain the same. Depositor money was passed through CMI and redeposited in National Irish Bank in the name of CMI and appeared in that bank as offshore accounts.

"Initially, it seemed that depositors could transact business over the counter in the usual fashion. Some time later an arrangement was put in place which worked as follows: if a depositor wished to withdraw, for example, £20,000, CMI would be notified in writing by the depositor and CMI would immediately instruct NIB to pay down the money.

"There was no advantage in terms of either security or return to the depositor from these arrangements. Significant start-up costs were charged by CMI and it seems that a management fee was charged by both CMI and NIB. Consequently, we must ask why depositors got involved in this costly arrangement.

"For example, I am reliably informed that NIB charged £20,000 to a depositor of a half-million pounds for making this arrangement. If we apply this pro-rata to the £30 million on deposit, NIB gained in excess of £1 million from this arrangement. CMI, of course, got very significant fees also.

"It makes no sense for a depositor to pay such fees unless there is some advantage, and since there is no advantage in terms of either security, return on investment or access to their deposits, the only explanation is that they were evading tax, and that the bank was facilitating them to do so."

Mr Noonan, who was speaking on the adjournment, said he had received a telephone call from a woman who said that two years ago she approached a leading building society with a deposit of £30,000 and was offered a facility to place it in an Isle of Man account. She declined the offer, but the arrangement suggested seemed to be the rate of return would be 1/4 per cent less than available in Dublin, but that there would be certain tax advantages.

The Minister for Finance, Mr McCreevy, said the Revenue were examining urgently all the tax issues relating to NIB and all necessary action would be taken to deal with whatever tax consequences emerged. The Central Bank had also been pursuing the issues raised.