TAOISEACH BRIAN Cowen has insisted decisions about Anglo Irish Bank staff salaries were a matter for the bank’s management and not for the Government.

The Taoiseach’s remarks came as Opposition leaders claimed legislation allowed the Government to intervene.

Fine Gael leader Enda Kenny said the reported increases in remuneration to almost 80 staff at the controversial bank “cannot be justified” and “it goes to the very heart of the lack of fairness in this society”.

He added: “Some 800,000 people in the public and the private sector have taken serious pay cuts and some 200,000 people have lost their jobs . . . We cannot expect the Irish people to accept that the only sections that can get pay increases now are either those involved in Nama or those involved in this bank, which is to be rescued again at an inordinate price when it brings in its disastrous results next week.”

When Mr Cowen said “the issues the deputy raises do not come up for sanction from Government” there were repeated interruptions from the Opposition that “you own the bank”.

The Taoiseach explained “there has been a reduction in numbers, extra responsibilities have been assigned to certain staff and there is a totally new management team in place. The board has the Government’s confidence in seeking to de-risk the bank and it is important that there are people in situ who can do that.”

The Fine Gael leader said section 50 of statutory instrument 411 of 2008 under the Credit Institutions (Financial Support) Scheme 2008 gave the Minister for Finance authority where the State support scheme was “being brought into disrepute” he could “instruct the covered institution in question to obtain and maintain certain obligations”.

But Mr Cowen insisted the Minister only had authority for the pay of senior management and fees to directors. As the staff affected by this decision are not senior management, decisions on their pay levels are a matter for management in the bank, he said.

Labour leader Eamon Gilmore asked the Taoiseach to confirm reports that the bank would announce losses of €14 billion. Mr Cowen replied that “it will be a matter for the bank to publish the report in due course”.

But Mr Gilmore said angrily that the Taoiseach was responding “as if this were some perfectly functioning, prosperous, profitable company doing its business. This is the zombie bank, the rotten apple at the heart of what happened in the Irish banking system which gave rise to the collapse in our economy, for which people all over the country have been paying for the past 18 months with their jobs, in their pay packets and living standards and in the quality of services being produced.”

He cited the Anglo Irish Bank Corporation Act 2009 which he said “states the Minister may give a direction in writing to Anglo Irish Bank, requiring it to do, or refrain from doing, anything which, in the opinion of the Minister, is necessary or expedient in the public interest”.

He asked “will the Minister for Finance today give a direction to the bank not to proceed with those pay increases until, at the very least, we find out the full story about this rotten bank and the extent to which the taxpayer must pony up for it”?

But the Taoiseach insisted it was a matter for the bank and said that “if we are going to have a situation whereby we express no confidence in the new board and management, that would be a recipe for chaos. I must ensure they get on with the day-to-day management of the bank.”