Guinness & Mahon Bank (G & M) has received legal advice that the money in the Ansbacher deposits did not belong to the Irish residents with which it is associated, including former Taoiseach Mr Charles Haughey.

The normal legal relationship between a depositor and a bank did not exist in relation to the deposits, the bank told the Comptroller and Auditor General, Mr John Purcell, during his inquiry into DIRT and the financial institutions.

On Tuesday the chairman of the Revenue Commissioners, Mr Dermot Quigley, said the Revenue is likely to apply shortly to the High Court for access to the identities of the various depositors linked to the secretive funds. However, the legal basis of the deposits could have implications for this move.

The deposits are known to be linked to senior business figures resident in the State and in 1989 were valued at £38 million. They were run by the late Des Traynor, financial adviser to Mr Haughey.

According to Mr Purcell's report, there were approximately 400 accounts in the name of Guinness Mahon Cayman Trust, subsequently Ansbacher (Cayman) Ltd, with G & M. All but about 30 of them were foreign currency accounts.

"The bank is firmly of the view and has taken counsel's opinion to the effect that the beneficial ownership of the moneys (sic) in these accounts, and therefore the beneficial ownership of the interest earned on these accounts, did not belong to Irish residents," Mr Purcell said in his report.

The relationship between Ansbacher and its depositors was not one of trustee and beneficiary but rather a contract whereby the bank borrows money and undertakes to repay its customers.

"The relationship is not one of where the bank holds moneys in a fiduciary capacity. This being the case in law, the moneys in G & M were not beneficially owned by the customers of Ansbacher (Cayman) Ltd. They were legally and beneficially owned by Ansbacher (Cayman) who, in turn, had a contractual obligation to its depositors to repay the amounts of their deposits."

Mr Purcell's report also reveals that College Trustees, a company based in Guernsey which is being investigated by an authorised officer appointed by the Tanaiste, Ms Harney, had deposits with G & M. The deposits were on the same legal basis as those of Ansbacher (Cayman), G & M told Mr Purcell.

College Trustees managed large investments for wealthy Irish business people. At one stage it owned a major shareholding in Clayton Love Distribution Ltd, an Irish frozen foods company owned by Mr John Mulhearn, son-in-law of Mr Haughey. The shareholding was sold for £1.4 million in 1993.

Last month Ms Harney appointed Mr Gerard Ryan as an authorised officer to College Trustees, as part of Mr Ryan's inquiry into the Ansbacher deposits. The inquiry is ongoing.

Mr Purcell was told by G & M that other companies which had deposits with Guinness & Mahon on a similar legal basis to Ansbacher (Cayman) and College Trustess were: Guinness, Mahon (Guernsey) Ltd; Guinness, Mahon Jersey Trust Ltd; Overseas Nominees Ltd; and subsidiaries of Credit Suisse.