BANK SCHEME:A DRAFT of the Government's bank guarantee scheme has been sent to the European Commission, the Central Bank and the Financial Regulator for approval, after being noted by the Cabinet yesterday.

The timing of the presentation of the scheme to the Dáil and Seanad will depend on the speed with which it comes back from the regulatory authorities and the nature of their observations.

Ministers approved the draft scheme having been brought through it by Minister for Finance Brian Lenihan during a Cabinet meeting which lasted for 4½ hours.

Earlier, Taoiseach Brian Cowen told the Dáil that the Government intended to finalise the scheme as quickly as possible.

He said officials of the Department of Finance, the Central Bank and the Financial Regulator were working on the plan.

"It is important to stress the need for discussion on the draft scheme later this week between the Irish authorities and the European Commission with regard to EU state aids and competition requirements," Mr Cowen told the Dáil. He said discussions at the meeting in Luxembourg between competition commissioner Neelie Kroes and Mr Lenihan were being factored into the drafting of the scheme.

A particular priority would be to ensure that the scheme appropriately addressed the issues of subsidiaries of overseas parent companies operating in Ireland with a substantial retail main street presence.

"The Minister, Deputy Brian Lenihan, and the commissioner both agreed it was important to take steps to guard against any undue distortions of financial flows, and the Minister indicated that such concerns would be addressed through the implementing measures currently being drafted, which will provide for controls and quantitative balance sheet controls.

"This is the up-to-date position and it is important to point out that the breaking situation in the United Kingdom also must be factored into our considerations here," Mr Cowen said.