The Minister for Finance, Mr McCreevy, told a chaotic Dail session that he had no idea how the appeal commissioner came to his decision in the former Taoiseach's tax liability case.

It was not his function to do so, he insisted, amid rowdy exchanges in the House on the decision by a tax appeal commissioner to reduce Mr Charles Haughey's tax liability assessment from about £2 million to nothing.

Mr McCreevy was repeatedly asked by Opposition deputies about the appointment of the brother-in-law of the Taoiseach as an appeal commissioner and the fact that he had adjudicated on the case.

Throughout the noisy 45 minute session, the Leas-Ceann Comhairle, Dr Rory O'Hanlon, called on deputies to accept that "the fact that a person happens to be related to a member of the House in no way reflects on their professional integrity".

The Minister told the House he knew no more than that the appeal commissioner, Mr Ronan Kelly, was Mr Ahern's brother-in-law and he criticised the Opposition for using "the old sly way of impugning a person's integrity, throwing it out and then saying that of course we are not impugning that person's integrity".

Mr Pat Rabbitte (DL Dublin South West) called on Mr McCreevy to agree that the wrong message was being sent to taxpayers "that the brother-in-law of the current leader of Fianna Fail should adjudicate on the tax affairs of the former leader of Fianna Fail".

The Democratic Left spokesman questioned how the assessment could have been reduced to nothing when Mr Haughey had conceded to the McCracken tribunal that he had received £1.3 million from the known donor in this case, Mr Ben Dunne. How could there have been no tax liability when Mr Haughey admitted receiving the money from a known donor domiciled in Ireland? The Minister said there were two appeal commissioners, Mr Kelly, a chartered accountant who formerly operated as a private consultant in the area of retail banking and Mr J.F. O'Callaghan, a senior tax consultant, both of whom were appointed in December 1992.

Fine Gael's finance spokesman, Mr Michael Noonan, asked if the Minister was aware of the widespread view that Mr Kelly, the Taoiseach's brother-in-law, "acted imprudently by not allowing his colleague Mr O'Callaghan to take the Haughey appeal case?"

He also pointed out that Mr Justice McCracken said the tribunal was "satisfied beyond all reasonable doubt that all of the monies paid by Mr Dunne were received by or on behalf of Mr Haughey, for his benefit or in one case for a member of his family". In view of the McCracken report statement, "can the Minister explain how Mr Kelly came to a different conclusion?".

Mr McCreevy said it was not a matter for him.

Mr Noonan asked what considerations led to the appointment of a man who was a qualified accountant with expertise in retail banking, rather than in taxation matters through a political appointment process as appeal commissioner. He asked if it was noted on the file that Mr Kelly was Mr Ahern's brother-in-law.

He asked the Minister to check the file. Mr McCreevy said he did not normally check the files of predecessors but he would do so if it would satisfy Mr Noonan.