TAOISEACH Enda Kenny is demanding a deal on reducing Ireland's banking debt as part of an agreement on tough new rules for euro membership, most likely to be put to a referendum in Ireland.
Mr Kenny told EU leaders last night he wants them to agree to delay repayment of some debts for up to 30 years, which would effectively mean some will get written off.
The Taoiseach is referring to €63bn borrowed by the State to recapitalise the banks.
Mr Kenny was locked in high-stakes talks with the leaders of the 27 EU countries last night trying to find common ground on a solution to the euro crisis.
Government sources last night attempted to play down suggestions that Mr Kenny was seeking this concession in return for agreeing to wide-ranging changes to EU treaties.
Mr Kenny said he wanted to see clear decisions on protection of the euro and stability of the eurozone.
"This is of absolute and critical importance and I hope the leadership of the Council focuses on this area this evening and tomorrow," he said.
The Taoiseach set out the Government's demands on the debt in a three-page letter to EU Council President Herman Van Rompuy, who is trying to broker a deal on the euro. He repeated his demands over an EU dinner last night in Brussels.
Mr Kenny's demand is for agreement on a deal on the repayment of some of the money used to pay for Anglo Irish Bank. He says the banking debt puts an "uniquely onerous cost" on the Irish people.
The Government calculates the total cost of cleaning up Anglo will be €47bn.
The deal being sought would cover part of this cost to the Irish taxpayer and make it easier to sell any referendum.
Tanaiste Eamon Gilmore said for the first time last night that the Government would be prepared to hold a referendum on a new EU treaty.
The Government's approach so far to solving the crisis in the eurozone has been to insist no new EU treaty would be required -- knowing it would be very difficult to get voters to pass it. Mr Gilmore maintained this was still the official policy -- but he also indicated a referendum would be held if Irish objections were not listened to at EU level.
"If that is what we have to do to save our currency, to restore our economy, to be able as a sovereign nation to borrow again on the financial markets and to ensure that no future government can ever again bring us to such a sorry state, then let us not be afraid to put that choice to the Irish people," he said.