Strong interest in the Telecom Eireann shares from major financial institutions in the US, Britain and Europe, as well as the Republic, means the offer to those investors will be many times oversubscribed.

The deadline for Eireann shares by retail investors passed yesterday but the other key element of the flotation, the sale of shares to institutional investors, continues until Tuesday.

This augurs well for the flotation's success as those institutions which find themselves short of Telecom Eireann stock will then have to come into the market to buy shares, driving up the price on offer to retail investors.

It will be next week before the Government sits down with its advisers to fix the price at which the shares should be issued and to whom they should be allocated. It has already indicated that 40 per cent will go to retail investors and 40 per cent to institutional investors. It has yet to decide what to do with the remaining 20 per cent but if retail investor interest is as strong as some believe, it may decide to increase the shares on offer to the ordinary public.

As expected, the last day for receipt of completed application forms from retail investors proved fairly hectic with thousands passing through AIB branches throughout the State to deliver their forms. Those involved in the flotation said it would be next week before the number of valid applications could be assessed.

Sources close to the Government said international precedent suggested that 15 to 45 per cent of the 1.18 million people who register would go on to make valid applications for shares.

The higher end of that range is common in countries on their second or third privatisation where there is already a shareholder culture while countries experiencing their first major privatisation tend to record figures toward the lower end of the range. Last night some sources said they believed the response in Ireland was to the higher end of the range, and could even exceed 500,000 people.

Although the numbers who applied for shares will be key to determining how many shares people are allocated, other interesting trends were evident in the early applications. More than half who applied early opted to pay using direct debit rather than cash or cheques while preliminary indications also suggest that around a third opted to hold the shares in the Telecom Eireann nominee account.

Early evidence also points to a large number of smaller investors applying for share amounts in the early thousands, suggesting many people may have opted to move money out of lower interest savings accounts and off deposit rather than taking out huge loans.

The Government will announce details of the offering on Wednesday and shares will start conditional dealing in Dublin, London and New York on July 8th.

Shares certificates and nominee account statements will be mailed out on July 14th, the day the shares will be officially listed and unconditional dealing begins. Along with the mailing, shareholders will receive information on which stockbrokers are offering share dealing services but applicants can expect the brokers to begin announcing their charges for selling Telecom Eireann stock next week.