No decision has been made on who will chair the committee which will inquire into the collapse of the Irish banking sector.

Government chief whip Paul Keogh said today the Committee on Procedures and Privileges (CPC) will choose the chairman of the inquiry but said no decision had been made on this appointment.

The new committee will start work by early May at the latest, he said. The CPC met last night to discuss the banking inquiry.

He said work on drawing up the terms of reference was "at an advanced stage" and said this work was being led by the Committee on Procedures and Privileges (CPC) and the Oireachtas.

The terms of reference will also set the rules for the treatment of witnesses before the inquiry.

He said the CPC will chose the chairman of the inquiry but added no decision had been made on this appointment.

Mr Keogh said he hoped the committee would start sitting by early May at the latest but it was unlikely any witnesses would be called before July.

"Once committee is set up they will have to receive legal advice on the terms of reference on how far they can go or cannot go," he told RTÉ's Morning Ireland.

Mr Keogh confirmed the committee running the banking inquiry will have the power to compel witnesses to attend.

He also stressed that the inquiry was “not a Government inquiry, it is an Oreachtas inquiry”.

It is understood one of the key elements of the standing orders will be a requirement that no member of the committee should have made any public comments about the banking crisis that could be regarded as biased.

This requirement will mean that many prominent political figures who have made trenchant speeches about the banking crisis will not be eligible to serve.

Mr Keogh said today that the CPC would consider the issue of bias with regard to the composition of the banking inquiry committee.

Government sources said no decision had been made as to whether the new committee will restricted to TDs.

However, the indications are that the Government favours the establishment of a small committee composed of around six TDs to handle the complex issues involved in the banking inquiry.