Fianna Fáil finance spokesman Michael McGrath has said the mortgage arrears crisis is getting out of control and insisted his party’s resolution proposals would shift power away from banks and towards borrowers.

Mr McGrath said mortgages associated with one in four family homes were either in arrears or had been restructured.

He called for an independent mortgage resolution office to be established.

Mr McGrath said the personal insolvency legislation had given the banks a veto in negotiations with borrowers in 99 cases out of 100.

Fianna Fáil’s Mortgage Resolution Bill 2013 will be debated in the Dáil this week, beginning tomorrow night.

Meanwhile, Mr McGrath said European finance ministers would “live to regret” their decision to back the Cypriot plan to levy small savers, which was rejected last week.

“I’m pleased a deal has been hammered out and Cyprus is going to remain in the euro... There will be a very bitter aftertaste following the decision nine days ago of the euro group finance ministers to agree to a proposal which would involve imposing losses on ordinary savers,” he said.

“I think that that was a very serious mistake. I think it is one that the euro group ministers will live to regret. They have now moved back from that and that is to be welcomed.”