Irish government backs down on Anglo debt plan

The Irish government has cancelled plans to place heavy restrictions on the accounts of major debtors of Anglo Irish Bank under a draft nationalisation law, said the finance ministry yesterday.

Under the original draft of the proposed legislation, anyone who owes the commercial lender €20 million or more would have been prevented from withdrawing money if the total in their accounts dropped below the amount owed.

The only way the debtor could have got around the restriction was by applying for the written consent of the bank.

A spokesman at the finance ministry confirmed reports in the Irish Independent and Irish Times newspapers that the draft legislation to be introduced to Parliament today, will not include these clauses.

"The clause was inserted as a precautionary measure," the spokesman said. "The Attorney General has since advised that it is unnecessary."