The Irish Government has announced that it will nationalise Anglo Irish Bank.

The bank is thought to be the Irish bank which is most exposed to the plunging property and construction markets.

The move, announced by finance minister Brian Lenihan, was prompted by concerns that the bank could be declared insolvent.

There was a €1.5bn (£1.3bn) preference share recapitalisation plan in place, which would have given the government 75 per cent voting control, but this has now been scrapped.

The bank’s shares have been suspended.

It has €100bn (£89bn) of liabilities, including €50bn (£45bn) of customer deposits and €20bn (£18bn) of wholesale deposits.