LABOUR’S FINANCE spokeswoman Joan Burton said her party had received legal advice that a “shadow Nama’’ was illegal.

Ms Burton asked about the status of the proposed legislation to establish Nama as “a toxic bank for failed loans to developers’’.

She added that it had been reported in the media that the Minister for Finance, Brian Lenihan, had appointed a shadow chief executive of Nama.

“We have obtained independent legal advice that it is not possible for a shadow Nama to function, because, under the terms of the laws dealing with the Finance Regulator, there is no permission to divulge confidential information on bank loans or on the banks’ books to anybody other than authorities designated in the legislation,’’ she added.

Ms Burton asked if the Government had received advice from the Attorney General on the creation of “this shadow Nama, which will eventually cost the taxpayer between €25 billion, according to the IMF , and up to €40 billion if it is done wrongly’’.

Tánaiste Mary Coughlan, who was taking the Order of Business, said that the Government was currently working on the National Asset Management Agency legislation. She said that it had been advised by the Attorney General that it would be published this session.