The Irish Nationwide Building Society has called on the Government to prevent the larger financial institutions from bidding for any of the State banks.

The chairman, Mr Peter O'Connor, also stressed that the Government should strongly resist suggestions that it should hold a continuing share in any of the State banks, ACC Bank and TSB.

"It should be a straight 100 per cent unconditional sale by open tender," he said yesterday. Mr O'Connor said the society continues to have an interest in both banks.

Speaking to members at its annual general meeting in Dublin, Mr O'Connor also expressed disappointment at the society's failure to secure a change in the legislation governing the flotation of building societies, which it has vociferously lobbied for. It wants the law changed to allow a society to enter a joint venture or to agree a takeover shortly after its flotation - this was rejected by the previous Government.

Mr O'Connor said the society would continue to press for such an amendment. "There is no logical or strategic reason to deny an individual financial institution the same freedom of choice and operation enjoyed by all institutions other than building societies," he told members.

Referring to the sweeping changes introduced last week to help first-time buyers to enter the property market, the chairman said that while the society welcomed any measures to calm the market, it was also concerned that such interference could prove counterproductive.

"Short-term solutions to long-term investment in housing is largely a delusion," he said.