TAOISEACH Brian Cowen was under mounting pressure last night from cabinet members and his own backbench TDs to hold an inquiry into the banking crisis.
The Government ruled out holding a tribunal of inquiry to investigate the banking crisis and now favours an Oireachtas committee to do the job.
A government source said that ministers do not believe a tribunal could be justified, given the exorbitant costs of previous tribunals investigating planning and payments to politicians.
Foreign Affairs Minister Micheal Martin also backed calls for an inquiry into what went on in the banks over the last decade.
While Mr Martin does not want an inquiry held immediately, his position is in stark contrast to Mr Cowen's refusal to say if an inquiry should be held.
Mr Cowen has not ruled out a banking inquiry, but he has urged far more caution about a probe when he said: "I simply have to give careful consideration to (calls for an inquiry)."
Mr Martin's support for the inquiry follows agreement by Finance Minister Brian Lenihan and Environment Minister John Gormley that a probe should be held.
Mr Gormley wants a decision on the inquiry details made early this year. But Mr Lenihan and Mr Martin want to put it off until the National Asset Management Agency (NAMA) is fully established and the banks are capitalised.
Central Bank governor Patrick Honohan has already said that an inquiry into the crisis was required, while a number of backbenchers are backing a parliamentary party motion to probe the banks.
Meanwhile, Cork North West Fianna Fail TD Michael Moynihan became the latest backbencher to join the chorus of calls for an inquiry. Mr Moynihan is chairman of the Economic and Regulatory Affairs Committee -- the most likely committee to hold the inquiry.
The Finance and Regulatory Affairs committee asked last year about bringing senior banking officials to account. However, legal advisers told the committee that an inquiry without powers to compel witnesses would prove a waste of time.
"If it is the agreed format that an Oireachtas committee is the best format, then it will have to have full powers and a referendum will have to be held to put those powers in place," Mr Moynihan said.
But the Public Accounts Committee (PAC) is also being considered, given its probe into FAS and other state agencies.
PAC chairman and Fine Gael TD Bernard Allen last night said he would be "willing and honoured to chair the inquiry because the victims of the banking crisis deserve it, expect it and should get it".
Mr Allen also rejected claims that an inquiry would distract from the work of NAMA.