A partner at Pricewaterhouse Coopers has told the Dáil's banking inquiry that €8-10 billion a day in deposits were being withdrawn from Irish banks in the run up to the guarantee.

Denis O’Connor told the committee banks were not involved in discussions leading up to the blanket bank guarantee and had only taken part in general discussions about potential responses.

Mr O'Connor was hired by the Financial Regulator in September 2008 after the collapse of Lehmann Brothers in the United States. PWC was asked to compile a report within nine days on short term liquidity and capital problems in Irish institutions.

It found that in its worst case scenario banks would lost €10. 6 billion. It had actually cost €64 billion.

Mr O’Connor said: “They (the banks) were not surprised. It was confirmation of what they already knew. There was a sense of extreme urgency.”

The investigation was commissioned by then financial regulator Patrick Neary as part of Project Atlas which began in September 2008, with Anglo Irish Bank, Irish Nationwide, and Irish Life and Permanent the focus of its work.

The other main lenders were subsequently added a month later.

Mr O’Connor said banks were often relying on personal guarantees from borrowers which proved to have no value.

Their report found just 22 men and their related companies owed more than €25.5 billion at the time of the crash, including former billionaire Seán Quinn, Cork developer Michael O’Flynn, and businessman Denis O’Brian.

Mr O’Connor said they and the Financial Regulator were extremely surprised by that revelation.

Mr O’Connor said nationalisation of Anglo Irish Bank was discussed in the week before the guarantee was agreed.

He said he was present at a number of meetings where a possible guarantee was discussed. Taoiseach Brian Cowen was present at just one of those meetings and the Minister for Finance Brian Lenihan was present at all of them.

Mr O’Connor said those discussions took place on either the 23rd or 24th of September 2008.

He denied comments by the National Asset Managemnt Agency Brendan McDonagh chief executive that nationalisation of Anglo seemed inevitable at those meetings.

Mr O’Connor said: “It was discussed but it was not the only thing that was discussed.”