It has been a bad few weeks for Mr Kyran McLaughlin, the multimillionaire stockbroker and adviser to the Government. He knew the trouble was coming.

He had been warned some time ago that documents from his personal files might be given to the authorities in an effort to cause him embarrassment. This is thought to have occurred more than once in recent years.

Mr McLaughlin (55) had lost possession of his personal files at the time of the break-up of his marriage a number of years ago, when it is understood his wife, Susan, took possession of the family home. A few months ago, Mr McLaughlin got his first indication that the files had come into other parties' hands.

A document was given to Mr Gerard Ryan, a civil servant from the Department of Enterprise, Trade and Employment. Mr Ryan was investigating the Ansbacher deposits, having been appointed an authorised officer in January 1998 by the Tanaiste, Ms Harney.

The document was entitled, "Note to John Furze", and detailed how Irish people could lodge money in Ansbacher deposits and be reasonably certain the Office of the Revenue Commissioners would never find out. Mr Furze, who died in 1997, was a Cayman Islands banker who was one of the central figures behind the deposits. It is understood Mr McLaughlin didn't know Mr Ryan had the document, or that Mr Ryan had been told that he, Mr McLaughlin, was its author. Mr Ryan completed his report for the Tanaiste in July and may have named Mr McLaughlin.

In September, during an application to the High Court for the appointment of inspectors to investigate the Ansbacher deposits, it was stated that the Furze note was written in 1983 by a "senior member of the financial services community in Dublin". No name was given.

In October Mr McLaughlin was contacted by The Irish Times and asked if he was the author of the note. Mr McLaughlin said he was not, that he had met Mr Furze in the early 1980s, but that he had had no dealings with the Ansbacher deposits. The call was the first confirmation he had that the threat to cause him embarrassment had been put into action.

Meanwhile, the Furze document had come into the possession of the Moriarty tribunal. It contacted Mr McLaughlin early last week and asked him to come to Dublin Castle to discuss the matter. Mr McLaughlin met the lawyers on Friday and told them he was not the author of the note. He said he was visited by Mr Furze in 1983 when Mr Furze was in Dublin trying to drum up business. Mr Furze had outlined how the deposits worked and left Mr McLaughlin with the 36-page note. Mr McLaughlin said he put the note in his files, and that was the end of it.

It wasn't the end of his difficulties. On the day before his trip to Dublin Castle, RTE had led its main evening news bulletins with a story concerning a Liechtenstein-based tax scheme. RTE had possession of a lengthy memo which on the face of it was drafted for someone in Dublin interested in hiding funds from the Revenue Commissioners.

Mr McLaughlin had been contacted earlier that day by RTE and asked if he was the person who had written the note to Mr Furze concerning the Ansbacher deposits. He said he was not. He was not mentioned on the RTE news.

However, he recognised the Liechtenstein memo and so now knew that a second document had been released. Mr Michael Noonan of Fine Gael was calling for all sorts of top-level inquiries into the memo. As yet, neither he nor his stockbroking firm, Davy Stockbrokers, had been mentioned in public. That was all about to change.

The Sunday newspapers disclosed that the Liechtenstein memo had been drafted for Mr McLaughlin and his fellow partners in Davy Stockbrokers, and that Mr McLaughlin was the until then unidentified person who had been questioned by the Moriarty tribunal lawyers.

However, while the two documents indicated the sort of thinking which circulated in the top echelons of the Irish financial community in the 1980s, they were not otherwise damaging. Mr McLaughlin said that he had not penned either of them, and Davy had not made use of either scheme. There was no reason for him to consider his position.

Then, on Tuesday of this week, Mr McLaughlin was asked by RTE if he had done business in a personal capacity with a Zurich-based accountant, Mr Edmund Burke. Mr Burke was a central figure in the scheme outlined in the memo on Liechtenstein trusts. This was the killer blow.

On Wednesday, Mr McLaughlin told his partners in Davy he had decided he had to resign. There was no pressure put on him to go from his partners, sources said. Mr McLaughlin released a short statement. He said he now knew documents other than the Furze and Liechtenstein memos had now been circulated to the media. The documents contained details of a trust he had established for his children, contributions for which were from after-tax income. "I am in contact with the Revenue to resolve outstanding tax issues, if any, which may have arisen from this arrangement or any other matters. While these issues remain unresolved I believe I have taken the appropriate course of action."

It was a humiliating development for a top partner in Davy Stockbrokers. The firm has a reputation in Irish business as arrogant, as having a view that it is markedly superior to its contemporaries in the stockbroking and financial analysts' community. Whatever about the general view of the company, however, there is no doubting that Davy is the kingpin of the Irish stock market and that it consistently holds in excess of 35 per cent of both bond and stock market trading business.

The Davy family has been in stockbroking in Dublin for more than six decades. The company was founded by James and Eugene Davy in the 1920s. The business remained small up to the 1960s, when Mr Brian Davy, the current chairman and son of James, joined the operation.

His arrival in the firm heralded a full-scale move into institutional investment work. Davy became broker to most of the State's publicly quoted companies and built up a lead in the industry for raising cash for Irish companies, and for placing shares with Irish institutions. It is still broker to most of the larger Irish plcs.

Towards the end of the 1960s Mr McLaughlin and Mr David Shubotham joined the firm from Aer Lingus. Mr McLaughlin was educated in Blackrock College and was an early business graduate. Both men rose quickly through the ranks and soon formed an alliance with Mr Brian Davy. Both were seen as tough, intelligent operators, with Mr Shubotham developing the firm's gilt business and introducing the Irish market to continental investors. Mr McLaughlin rose to become the head of equities. He also became a significant link between the firm and the State, playing a key role in landing State contracts worth many millions.

In the 1980s Davy was top of the pile in the Dublin stockbroking community. It gave financial advice to the biggest companies and the richest individuals in the State. In 1983, the Cayman Islands banker, Mr Furze visited the firm to see if he could interest it in the Ansbacher deposits. If the Davy partners had been interested, they would have been able to direct a lot of business his way.

Mr Furze met Mr McLaughlin who was, by then, a partner. Mr Furze was a senior executive with Guinness Mahon Cayman Trust (later Ansbacher [Cayman]), the Cayman subsidiary of Guinness & Mahon bank, Dublin. The chairman of the Cayman subsidiary was the late Mr Des Traynor, the financial adviser to Mr Charles Haughey. It was at the meeting with Mr McLaughlin that the broker says Mr Furze handed over the document, "Note to John Furze". The note, seen by The Irish Times, opens: "John, I have set down blurb representing my understanding of the position in relation to the formation of a discretionary trust arrangement. This material is based primarily on my discussion with yourself yesterday but also to a secondary degree on an earlier discussion with some mutual acquaintances of ours."

It is not known who wrote the document, which runs to some 36 pages. It is an unfinished document which contains questions from the author and answers supplied by Mr Furze. The page numbers are written in handwriting.

The document notes that money can be "moved, invested or divested from time to time simply through a telephone call" and that in the event of the client's demise, "it is possible to give effect to the client's wishes without drawing up a will and this is of advantage because a will has to be probated and is a public document" which a tax authority could get access to.

Mr McLaughlin says he filed the note away and Davy never got involved. Davy's joint managing director, Mr Tony Garry, said this week that it "did not participate in or promote any so-called tax schemes at any time in the past or the present".