The Labour Party leader, Mr Ruairi Quinn, has said he does not see the necessity of having an inquiry into how a £28,000 donation to the party was used to clear a loan outstanding from the unsuccessful 1994 European election campaign of a former RTE reporter, Ms Orla Guerin.
Mr Quinn said he did not accept that Woodchester Bank's cancellation of the loan, which had been personally guaranteed by four senior members, was embarrassing for the party.
Following a request in 1996 for a political donation, Woodchester Bank agreed to offset a donation of £28,000 to the Labour Party against the outstanding loan of £24,000 and £4,000 interest.
The loan had been guaranteed by the Labour leader at the time, Mr Dick Spring, along with Mr Fergus Finlay, Mr John Rogers and Mr Greg Sparks.
Although Mr Quinn described it as a "substantial donation", the £28,000 received from the bank was not reflected in the party's accounts. Mr Quinn accepted the arrangement could be described as an "off balance sheet transaction".
The negotiations with Woodchester on the debt write-off were undertaken by staff in Mr Spring's office in 1996.
Mr Quinn, who was director of elections for the 1994 European campaign, said he had little or nothing to do with finances for the election and he only became aware of the write-off last Thursday.
In the election contest, Ms Guerin was added as a candidate by the Labour leadership after the outgoing MEP, Ms Bernie Malone, won a party selection convention.
Mr Quinn said that as Ms Guerin had to resign her job in RTE to contest the election, while Ms Malone had access to her MEP's salary, "it was necessary to raise money for Orla Guerin to fight the campaign".
Rejecting the need for an inquiry into how the debt and donation were treated in the party's accounts, Mr Quinn said he was available to meet Ms Malone to hear any concerns she had.
He said the practice of senior party figures personally guaranteeing loans for election campaigns was not unusual and had been adopted by the party in the 1990 and 1997 presidential campaigns.
He also said that when Labour and Democratic Left merged earlier this year it was agreed to adsorb similar debts at party level.
Mr Quinn denied there was a connection between the Woodchester money and his stance in 1994 on the future of the TSB bank which was in discussions with National Irish Bank on a merger.
In May 1994 Mr Quinn, who was minister for enterprise and employment, said the fate of the TSB "should not be settled without competitive bidding from other sources, particularly the Ulster Bank and Woodchester, who have indicated an interest".
The agreed policy of the Fianna Fail-Labour coalition was to create a third banking force through the merger of the TSB with the state-owned ICC and ACC financial institutions.
The former Taoiseach, Mr Albert Reynolds, last night told TV3 News that Mr Quinn's political accountability was at stake as the Labour Party had been "promoting the interests of a private bank at a time when we now know they were in receipt of a political loan from that particular bank".