The Minister for Finance, Mr McCreevy, meet the Irish League of Credit Unions (ILCU) for the second time in a number of weeks yesterday, indicating a thaw in relations between the two.

The two sides discussed the impasse around the taxation of credit union savings.

It was the second meeting in a number of weeks and followed a prolonged stand-off after Mr McCreevy sought to impose a 20 per cent DIRT tax on credit union savings in his first Budget three years ago.

The proposal was shelved in the wake of protests from the ILCU but the Minister claimed the body had been aware of the proposals and had indicated acceptance of them prior to the Budget.

Mr McCreevy's decision to end his dispute with the league coincided with a fall in the popularity of the Government after a number of setbacks during the summer.

In a statement issued after the meeting, the Minister said: "My discussions today with the Irish League of Credit Unions were very constructive and we will be meeting again in the next week or so to explore the issue further".