Demands were made in the Dail yesterday for the resignation of the Minister for Finance, Mr McCreevy, after remarks he made about Opposition deputies, whom he did not name.

Mr McCreevy was also accused of arrogance and of treating the Dail with "appalling contempt" as he dealt with questions about the Taoiseach's radio remarks when Mr Ahern said the former Supreme Court judge Mr Hugh O'Flaherty should give his account of the Sheedy affair.

During rancorous exchanges Mr McCreevy refused to withdraw remarks about "second chances" given to members of the Dail. As Opposition TDs shouted "resign" and "the Minister should get out", Fine Gael's Finance spokesman Mr Michael Noonan protested at the Minister's "attempt to drag a person's private life into this debate". Mr McCreevy, however, refused to withdraw the remark and said, "I named nobody". Labour's leader, Mr Ruairi Quinn, questioned why Mr Ahern was not there to answer questions and accused the Taoiseach of "political cowardice". He asked if Mr McCreevy agreed that Mr O'Flaherty should explain as soon as possible the "missing bit in the whole sorry, sad Sheedy saga". The Minister said Mr O'Flaherty was giving selected interviews.

Mr McCreevy also insisted the former judge's appointment was not done on a "nod and a wink" and reiterated that "it is our intention to maintain the nomination of Mr O'Flaherty. It is now a matter for the bank to carry through the written procedures and I will be speaking to the president of the EIB to ask him to expedite this."

During bitter exchanges, Mr McCreevy gave short replies, often just a mere "no" and was accused of arrogance and contempt for the Dail. He had told the Opposition he was quite satisfied that Mr O'Flaherty was the "most outstanding candidate Ireland has ever put forward for that position". Mr Jim Higgins, Fine Gael's justice spokesman, asked what kind of "twisted logic" was the Minister applying. "He sat in Cabinet and booted this man from office on the basis that he was not fit to continue serving as a Supreme Court judge but is now of the opinion that Mr O'Flaherty has manifest qualities which deem him suitable for one of the highest banking positions in Europe."

Mr McCreevy asked about the logic "in making a connection between an appointment to the European Investment Bank and the issues which arose in 1999". When Mr Noonan replied "they involve the same person", Mr McCreevy said: "There are deputies in your party sitting around and about you, to your right, who were given a second chance, sitting in the front row to your right, and some of them should recall it very well."

There was a brief silence and then calls for his resignation and remarks that the Minister should "do the decent thing and go". The Government benches were silent. Mr Noonan said the remarks were "beneath the Minister", while the Fine Gael leader, Mr John Bruton, said Mr McCreevy should get out.

Mr Quinn said the Minister "might like to reflect on his remark", while Mr Noonan criticised Mr McCreevy's attempt to "drag a person's private life into this debate". When Mr McCreevy said "I named nobody", Mr Bruton said that none of the Minister's colleagues supported his remarks.

Earlier, Mr Joe Higgins (SP, Dublin West) put it to the Minister that the method of appointment of "friends of political parties" was now totally discredited but Mr McCreevy replied that "it's called democracy".

Mr Jim Higgins, Fine Gael's justice spokesman, said the Minister was showing "appalling contempt" for the House. He asked if Mr McCreevy shared the Taoiseach's view that Mr O'Flaherty had questions to answer, and he criticised the Government's "twisted logic".

The Minister repeated his remarks, made in the Dail in May, and said, "the controversy that surrounded Mr O'Flaherty's departure from public office last year should not be allowed to obscure a record of long and distinguished service to his profession - 30 years' practice at the bar and almost a decade sitting in the highest court of this State." He added that it would "bring credit to Ireland that we can provide a European institution with yet another personage of such intellect, qualifications and experience".

Mr Noonan had asked the Minister if he had been briefed by the Taoiseach or his officials about his radio interview, and if he had not been briefed "what is he doing here this afternoon?"

Mr McCreevy said he was in the Dail because he was the Minister responsible for processing the nomination of Mr Hugh O'Flaherty to the European Investment Bank. Mr Noonan accused the Minister of "dodging" the questions he was asked.

Asked if the Minister discussed his reply with the Taoiseach before answering the question, Mr McCreevy said all members of Cabinet shared "collective responsibility".

Mr Quinn accused him of being "remarkably arrogant", and said that in three years Mr McCreevy had moved from being "revered as being blunt and painstaking" to an "arrogant man".

The Minister replied that "if I was to attend a school where lessons in arrogance were taught I would attend the one frequented by deputy Quinn". Mr Jim Higgins asked if the Minister was at the Cabinet meeting in April 1999 when it was decided to write to Mr O'Flaherty to advise him the Government was considering proposals for his removal from the Supreme Court.

Mr McCreevy replied that a Supreme Court judgment on Cabinet confidentiality meant it was "not possible for members of the Cabinet to confirm or deny what has gone on in Cabinet".

Asked by Mr Bruton about the Taoiseach's radio interview, Mr McCreevy said that Ministers for finance "have very little time to be listening to the radio".

Mr Bruton asked him if he was "happy with a situation where a former judge will answer questions on a radio show but refuses point blank to answer them before a committee of this House". The Minister replied that it was the third time he had been in the Dail giving the reasons Mr O'Flaherty had been nominated. "I am satisfied that Mr O'Flaherty is the most outstanding candidate we could put forward at present."

Mr Jim Higgins asked who approached the Minister on behalf of Mr O'Flaherty, and if the Minister had approached Mr O'Flaherty before consulting his Cabinet colleagues. He asked if he discussed the Sheedy affair with Mr O'Flaherty when he spoke to him and how the appointment was made and why a Cabinet meeting was not called in respect of it.

Mr McCreevy: "The answer to the deputy's first three questions is no, no and no. The answer to the later questions is that the matter was decided by the Government." The Fine Gael TD accused the Minister of taking a "short cut" and adopting a "nod-and-win approach" to this "most senior appointment", but Mr McCreevy insisted that a "nod-and-wink" approach was not taken in regard to the appointment.