What was astounding yesterday was not so much the Comptroller and Auditor General's report on Project Eagle (and that in itself was astonishing) but Nama's spectacular rejoinder to it. The blowback by Nama against the C&AG and its vehemence was unprecedented.

The C&AG is the public’s spending watchdog. When it investigates and finds that taxpayers’ money was wasted, the State body or agency involved might whinge a bit, but it usually takes the medicine.

It is like getting penalty points after being stopped at a speed trap by a guard holding a hairdryer. You feel hard done by (there are motorists out there getting away with far worse than you), but there is nothing you can do about it.

The report is damning. Its key finding on the 800 properties sold to American firm Cerberus for €1.6 billion reads: "The decision to sell the loans at a minimum price of £1.3 billion involved a significant probable loss of value to the State of up to £190 million (or €220 million)."

But Nama hit back with equal ferocity. It rails: “The key finding of the report is fundamentally unsound and unstable and cannot be left unchallenged.”

Nama goes on to accuse the C&AG of making an incorrect assumption on the discount rate. It alleges the C&AG produced no evidence to support the contention that a better price could have achieved if the portfolio had been sold off piecemeal rather than in one lot.

Nama also claims nobody could have achieved better value for the sale than it did - even if the portfolio was sold today.

The agency has launched an extraordinary PR campaign, supported by documents and with Frank Daly doing a series of interviews, including one with Cathal Mac Coille on Morning Ireland this morning.

However, it has failed to convince on the situation surrounding Frank Cushnahan or those involved in securing success fees.

So what happens now?

That unsightly and unusual clash left the Government with no option but to give the green light to an inquiry.

Taoiseach Enda Kenny will meet Opposition leaders today to tease out the terms of reference and to see what they can do to ensure it has a cross-Border reach.

Nama might have been on a stronger footing on the valuation, but it skirted around the issue of Frank Cushnahan, saying his actions had no impact on the outcome.

The agency is still in denial about Cushnahan and the corrosive effect the disclosures on BBC’s Spotlight will have on the agency.

It was strange to see Minister for Public Expenditure Paschal Donohoe as a kind of bystander as two of the most powerful bodies in the State went after each other like two ferrets in a bag.

Being Paschal, he expressed confidence in both bodies, but something is going to have to give. An inquiry is going to have to establish that one is right and the other wrong. It is also going to have to deal with the Frank Cushnahan conundrum.

What was disclosed on Spotlight cannot be dismissed. There is a clear allegation of corruption, and that needs to be fully investigated.

There is also a political charge from Fianna Fáil that could be potentially embarrassing for the Government and for Michael Noonan.

The party’s finance spokesman, Michael McGrath, referred to the Government decision to direct Nama to accelerate the sale of its assets and asked if that led to deals such as Project Eagle.

The process is going to be tricky. There will be a PAC inquiry - and its work could be delayed by criminal investigations - and then a wider investigation. This Government will be a distant memory before any of that is concluded.

We will have to wait to see if there is a basis to Mick Wallace’s claim that this is the biggest financial scandal in the history of the State.