The High Court inspectors' inquiry into the Ansbacher deposits has already cost £500,000 (€635,000) and is likely to cost more than £1.4 million before it is completed.

The inspectors have engaged a senior tax adviser to help them analyse the "very sophisticated" tax schemes which were used by the Cayman Islands bank and its Irish customers from the 1970s to the mid-1990s.

They have also engaged legal services in London and the Cayman Islands as part of their decision to make an approach to the Cayman courts for permission to take evidence from the Cayman bank. That case is expected to go ahead in the autumn or winter.

In a letter to the Department of Finance from the Department of Enterprise, Trade and Employment on May 9th, 2000, Finance was informed that costs to March 31st, 2000 totalled £498,365 and the projected costs for the following quarter were £281,000. A copy of the letter was released on foot of a request under the Freedom of Information Act.

"If the final six months expenditure in the current year runs at the same level as the period January to March 2000, total expenditure will run to circa £1.35 million," the letter said.

"However it can reasonably be expected that there will be significant legal expenses arising both in respect of litigation here and overseas, of a currently unquantifiable nature."

In the period September 1999 to June 2000, the amount paid to the three inspectors will total £188,000. The inspectors are Mr Justice Declan Costello, Ms Noreen Mackay and Mr Paul Rowan.

The inquiry is expected to complete its work by the end of this year or in early 2001. It originally engaged Mr Michael Cush SC, and Mr Lyndon MacCann as its legal counsel, and subsequently engaged Mr Fintan O'Connor, who is preparing summaries of relevant evidence given to the Moriarty tribunal.

The inquiry has also engaged the services of Mr Tony Bueno QC, who is based in London and conducted work for the McCracken (Dunnes Payments) tribunal. "Mr Bueno has been engaged by the inspectors arising from his considerable expertise and knowledge of Cayman company law and of Ansbacher (Cayman) Ltd. He has researched and advised the inspectors on all matters relating to the securing of evidence from the Cayman Islands, and he will be acting for the inspectors in any litigation that takes place in Cayman, which will probably commence in late summer/early autumn," according to another letter from the Department of Enterprise, Trade and Employment to the Department of Finance.

The inspectors have also used the services of Quin & Hampson, a Cayman Islands law firm which was also used by the McCracken tribunal.

Taxation advice is being supplied to the inspectors by Mr James O'Hara, of O'Hara, Dolan & Co, Main Street, Longford. A decision that an adviser was needed was taken earlier this year by the inspectors and Mr Rowan informed the Department of Enterprise, Trade and Employment in February "that the selected adviser should not, as far as possible, have any conflict of interest and should be available to commence the assignment virtually immediately".

Mr Rowan wrote that the inspectors required "an analysis of the relevant taxation provisions from 1970s to date, specifically the law and practice relating to the transfer of assets abroad, settlements and trusts, penalties, deduction of tax from interest payments, place of business/ residence issues, and the economic/ social environment of the seventies and eighties".

The adviser would help analyse evidence of possible tax evasion. "In recent days it has become clear that very sophisticated schemes were being employed which require careful analysis as to whether they were avoidance or evasion."

A decision to remain in offices in Trident House, Blackrock, Co Dublin, and not to move to Ormond Quay, close to the Four Courts, as had been envisaged at one stage, is understood to have been taken because of the expense it would involve, and because it is felt the inquiry may be completed by early 2001. The saving involved is estimated at about £300,000.

Some 120 customers, 100 of whom were Irish residents, were identified as having had Ansbacher accounts in the confidential report of authorised officer Mr Gerry Ryan. Mr Ryan's report led to the appointment of the inspectors, whose report may be published.