IRELAND’S £3.25 BILLION (€3.87 billion) bilateral loan facility from the United Kingdom will be reviewed every six months. The British chancellor of the exchequer George Osborne, who will today publish legislation seeking approval for the loan from the House of Commons, has insisted he does not want to offer similar loans to any other euro-zone country that gets into trouble.

The UK is lending nearly €8 billion to Ireland by way of funds it has contributed to the International Monetary Fund and a European Union stability fund.

He told the House of Commons’ treasury committee that the direct loan was “absolutely exclusive to Ireland”. He said today’s legislation gives him freedom to finalise matters with Ireland, but does not give him freedom to do so with any other country.

Negotiations on the interest rate were still under way, he said, though he expected it would be set “within the range, rather than outside” the charges levied by the IMF or EU.

The legislation will set a cap on the maximum amount of money that can be lent to Ireland and it will be subject to a five-year “sunset” clause that cannot be renewed to make it impossible for the British government to loan money to Ireland indefinitely without new legislation. “This is not a permanent provision for making loans to Ireland,” he said.

Asked if a new Irish government could renegotiate the terms of the loan, Mr Osborne told Conservative MP Michael Fallon: “The final details are being concluded, as we speak, with the Irish Government.

“You can only deal with one government at a time. The main Irish Opposition parties, as I understand it, and I am going on reports from Ireland, are broadly in favour of the international assistance package,” he said.

The chancellor has faced criticism from some Conservative and Labour MPs, and did so to an extent again yesterday, for his willingness to lend Ireland money when British public services are being cut, but he insisted it was in the UK’s interest to so do because Ireland and the UK share a land-border and because of the need for stability in Northern Ireland’s political and security situation.

Responding to Labour MP John Mann, Mr Osborne said Ireland had failed to regulate its banks properly “and they are paying a very high price for that.

“They were not the only ones in Europe to fail to regulate their banks properly.”