Mr John Hurley, the senior civil servant in the Department of Finance, will be the new governor of the Central Bank. The incumbent, Mr Maurice O'Connell, has indicated to the Minister for Finance, Mr Charlie McCreevy that he will be stepping down on March 10th.

Mr O'Connell had been due to retire last May at the end of his seven-year term, but stayed on to oversee the introduction of the euro, at the request of the Minister. Mr Hurley, who is secretary general of the Department, has served on the board of the Bank for the past two years.

A number of significant issues face the Bank and will have to be resolved either before Mr O'Connell leaves or shortly afterwards. Mr McCreevy has asked the Bank to transfer to the Exchequer some €240 million (£189 million) of windfall profits expected from the introduction of the euro. The Bank has also been asked to look at the whole issue of its reserves policy to see if some of the general reserves can also be handed over to the Exchequer.

The board of the Bank has met twice since the Budget and is scheduled to meet once more - at the end of February - before Mr O'Connell steps down. It would not comment yesterday on whether the board had reached agreement on the issues.

The issue of the introduction of the single financial regulator may also remain unresolved when Mr Hurley takes over. A compromise agreement between Finance and the Tánaiste's Department of Enterprise, Trade and Employment reached early last year has not yet been implemented.

Under the agreement, the Central Bank retains supremacy over a new regulatory structure.

Fine Gael criticised the appointment of Mr Hurley. The party's deputy leader Mr Jim Mitchell said: "The governor of the Central Bank should, among other things, always undertake independent critiques of the policies of the Department of Finance, and this is very difficult when the person has recently been a leading figure in that Department." He said the DIRT inquiry had "clearly identified the cosiness and blurred lines between the Department of Finance and the Central Bank".

Mr Hurley was secretary-general for Public Service Management and Development in the Department of Finance and secretary-general in the Department of Health before getting the top job in finance in early 2000. He is a member of the board of the National Treasury Management Agency and the council of the Economic and Social Research Institute.

He has also held a number of other high-level posts including chairman of the Top Level Appointments Committee, which makes recommendations on senior civil service posts. He is married with a son.