Taoiseach Enda Kenny has assured former residents of Priory Hall in Dublin that he will do something about their situation but appealed for more time to “clarify what is the best thing to do.”

He said it would be a “complete injustice” for people to be expected to pay mortgages and interest on houses they will never live in when banks and developers were “helped in so many issues.”

The High Court ordered the evacuation of 256 residents from the complex in October 2011 because of a potential fire hazard. Since then Dublin City Council has been housing 41 families in temporary accommodation at a cost of about € 3 million.

In May the Supreme Court adjourned until October 15th proceedings brought by the council concerning the evacuation to allow the mediation process to continue.

Speaking in Co Cork today, Mr Kenny described Priory Hall as "the worst of what occurred during the so-called Celtic Tiger years where people through no fault of their own were effectively put into houses that were death traps."

“This is not going to sort itself out. I spoke to Minister Hogan about that. There is the issue of the rent matter that is before the courts,” he said.

“I want the people to know that just as in the same way commentators said we wouldn’t do anything about the Magdalenes, or the pyrite problems or Priory Hall, I can assure you that we will. We just need a little more time.”

“ I have asked for a report in relation to this matter. I just need a little more time to clarify what is the best thing to do. I don’t want to interfere in any way with the court case.”

Yesterday residents of the complex requested a meeting with Mr Hogan after he indicated the Government would consider demolishing and rebuilding the apartment complex.

Mr Hogan said he would intervene once a mediation process, under the chairmanship of retired Supreme Court judge Joseph Finnegan, between Dublin City Council and former residents concludes next month.

The Minister was speaking on RTÉ radio when he added that the Government had a “very open mind” about dealing with Priory Hall.

“We may have to demolish and start again,” he said, indicating that the solution could cost up to € 12 million.

AIB yesterday said it might offer debt write-downs to Priory Hall mortgage holders. The bank's chief executive David Duffy told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform: "We will negotiate an individual solution with up to and including debt write-down if the circumstance warrants it."

He added that the 27 AIB customers in Priory Hall, of which 18 were home loans and the remainder buy-to-let properties, are currently on moratoriums.

“We are very sympathetic because this isn’t an issue that is typical of the circumstances that we’re dealing with,” Mr Duffy said, adding that the “great majority” of Priory Hall customers have been spoken to directly.

Bank of Ireland chief executive Richie Boucher told the Committee up to eight former residents of the apartment complex had owner occupier mortgages with the bank.

The majority of these had nominated a third party to engage with the bank, he said, and discussions were ongoing.

He said he could not give any specific commitment with regard to Priory Hall, which has been vacated for some time as a result of safety concerns, but that he would be keeping an eye on how other banks approached mortgage holders.