Minister for Finance Michael Noonan expressed confidence the banks would be able to deal with those in mortgage difficulties if the approach was right.

He said averages were a bit misleading, but he had been told yesterday by AIB that average arrears in the bank were €3,000, which was not huge.

“It might be huge on an individual couple but, overall, I cannot see any reason, if this is addressed systematically in an organised way, that the banks cannot work their way through this for the benefit of people with impaired mortgages.”

Mr Noonan said that was what was now being driven hard by the Central Bank and his officials. The Cabinet sub-committee was also overseeing the work. The Minister said he had met the three main banks yesterday, and they seemed to be making progress.

Fianna Fáil finance spokesman Michael McGrath said he dealt with many individual cases where people were trying to get mortgages restructured.

It was fairly straightforward to get interest-only arrangements, arrears capitalisation and extension of the term. Perhaps 99 per cent of the restructurings were done by traditional methods. However, to get the more innovative solutions, such as the split mortgage or mortgage-to-rent, was more difficult. Something would have to be done to ensure there was action on putting proper long-term restructurings in place, he said.

Mr Noonan said a schedule had been drawn up for each of the banks.