The European Commission has approved the State’s insurance compensation fund being used to provide more than €700 million to cover losses at Quinn Insurance, which is in administration.

Competition commissioner Joaquin Almunia said the plan would provide “a viable future” for the healthy parts of Quinn, as well as ensuring “an adequate burden-sharing by the shareholders”. Anglo Irish Bank, which is taking over the viable Irish part of the insurer, is not contributing cash in the deal but will receive partial ownership through the release of guarantees.