Independent TD Mick Wallace has said he is taking legal advice after receiving a loan repayment demand for up to €2 million from Cerberus, the United States fund at the centre of controversy over the purchase of National Asset Management Agency loans.

Mr Wallace, who has been one of the fiercest critics of the Cerberus purchase of Nama’s Project Eagle Northern Ireland loan book, confirmed yesterday that lawyers for the fund had made the demand over a personal guarantee he gave for loans for Wallace’s Taverna, an Italian restaurant on Dublin’s quays.

Legal advice "I got the letter from Arthur Cox, which is representing them, during the week. I don't know how I'm going to deal with it yet, but I'll need legal advice first before I decide what to do," he said.

Mr Wallace said Cerberus had promised it would treat borrowers with fairness, “so I will be interested to see how they treat me”.

Cerberus was also last week named as preferred bidder for Nama’s Project Arrow portfolio of non-performing loans, a tranche with face value of more than €6 billion for which it is thought to have bid about €800 million.

Mr Wallace said yesterday Minister for Finance Michael Noonan should suspend the sale of Arrow to Cerberus until the results of investigations into Project Eagle's sale are known. That deal has come under scrutiny over claims that business and political figures were allegedly due huge payments due to their role.

"The UK's National Crime Agency and others are looking into that deal. Noonan should step in and stop [the sale of Arrow to Cerberus] until we know the result of the other investigations."

Mr Wallace said the Government and Nama should also investigate whether some of the 1,900 sites and properties contained in Arrow could have been used for State-backed affordable housing.