National Irish Bank's chief operating officer, Mr Philip Halpin, has been "seconded to work on an important strategic project" for the bank's parent, National Australia Bank group, the bank's staff have been informed.

Mr Owen Vanzuyden, who has been working with National Australia's Clydesdale Bank in Glasgow, is to assume the position of NIB general manager banking and "to deputise for Mr Halpin in his absence", according to an internal notice posted on NIB staff notice-boards last Friday.

Mr Halpin would not comment on the development when contacted last night. A spokesman for NIB would not elaborate on the nature of the project on which Mr Halpin is to work, or on how much time the project is expected to take.

Mr Halpin, who took over responsibility for the day-to-day running of NIB in July 1996, played a central role in the bank's reaction to the controversies on fee and interest overcharging, and the marketing of unauthorised offshore insurance products.

He was strongly criticised by the chairman of the Dail Committee of Public Accounts, Mr Jim Mitchell, when he appeared before its DIRT inquiry two weeks ago. Mr Mitchell was unhappy with Mr Halpin's replies on whether he felt a letter from the bank to the Revenue Commissioners in February 1998 was a full and complete response to questions which had been put to NIB by the Revenue. The banker told the committee the bank had unintentionally failed to give a full and complete answer to the Revenue.

Mr Halpin was questioned as to why NIB had not included particulars on DIRT irregularities in its reply to Mr Padraig O'Donghaile, a chief inspector with the Revenue, after it was requested to do so. He admitted that major findings on DIRT compliance, from a theme audit carried out in 1994, had not been given to Mr O'Donghaile.

The omission of certain facts from the letter to the Revenue emerged when the Dail committee got two versions of the letter.

"If we did not supply that information to the Revenue at the time, it was not done with intent," Mr Halpin said. "We replied to the questions as best we could under extreme pressure, and all those matters were then taken forward," he said.

The omission concerned a reference to £34 million invested in the NIB-marketed Clerical Medical Insurance offshore products.

Mr Halpin was chief economist and head of NIB's treasury division before being appointed chief operations officer. During his time as chief economist, he had a high media profile.