Taoiseach Enda Kenny said he would publish the letter from Mr Justice Brian Cregan, the chairman of the inquiry into Irish Bank Resolution Corporation (IBRC) sell-offs, to him about his legal concerns over the inquiry "later today".

The Taoiseach also said that the judge is to publish his determination on the matter.

Mr Kenny said he would also publish the judge’s interim report, which he expected to receive shortly, possibly next week.

Mr Kenny told Fianna Fáil leader Micheál Martin in the Dáil that the Attorney General could not give formal legal advice to the Government without full knowledge of the interim report.

The chairman of the inquiry had requested that the Government wait until it receives his interim report before it takes action on the future of the investigation.

The inquiry is investigating a number of sales, including that of Siteserv, to businessman Denis O'Brien.

However, the chairman of the inquiry had warned in a letter to the Taoiseach’s department that the investigation would face successful legal challenges if it attempted to use confidential banking information.

The Taoiseach pointed out that 12 to 14 inquiries had been conducted under the relevant legislation, but that “no judge in the past has equated confidentiality with privilege”.

He said the matter would be discussed at Cabinet and that he would ask the Dáil for its advice before taking a decision, whether on legislation or other options.

Mr Kenny said: “I don’t expect the inquiry should collapse.”

Asked when he knew of the inquiry’s legal difficulties, Mr Kenny said: “I received a letter from Judge Cregan last Friday.”

Government knowledge

Mr Martin questioned Mr Kenny in the Dáil about when Government officials knew there were difficulties.

Mr Martin said: “Are you saying Government officials were aware of this prior to this week?”

Mr Martin said there had been an article in The Irish Times about legal issues and that former IBRC chairman Alan Dukes had discussed the issue two months ago.

Mr Martin said the liquidator and Department of Finance were claiming privilege in write-offs involving the assets of the Irish people.

Sinn Féin leader Gerry Adams said the Government's assertion that it was unaware of legal difficulties was not credible and he accused the Taoiseach of stonewalling on the issue.

Mr Adams said: “What advice did you receive from the Attorney General in relation to examining confidential documents?”

Mr Kenny told Mr Adams not to assert that somebody was trying to restrict information.

The Taoiseach said he was obliged by law not to talk about any of these things: “I don’t deal in speculation or rumour.”

Common good

Independent TD Catherine Murphy, who first raised concerns about the Siteserv sale and the write-off of €119 million of its debts in the sale, said the IBRC had one remit and that was to ensure that citizens got maximum value.

“We all collectively pay off the debts of many of these borrowers who then have their confidentiality protected,” she said.

Ms Murphy said this issue is about individuals rather than the common good, which should be the primary interest.

She said special liquidator Kieran Wallace was now claiming privilege and refusing to cooperate.

She also said that Minister for Finance Michael Noonan is providing documents "inside a circle of confidentiality" and was thus not fully cooperating.

She said the best way to shut down debate is to have a commission of inquiry.

The Taoiseach told her he did not expect the inquiry would collapse and he believed the judge would give recommendations on how to proceed in his interim report.