The Irish government last night announced a 10bn (£9bn) fund to recapitalise the country's banks.
The Department of Finance said the state may use money from the National Pension Reserve Fund for the scheme.
Existing shareholders and private investors will also contribute. The government said the scheme would help boost the flow of funds to the beleaguered economy and limit the impact of financial market turmoil on businesses and individuals.
"The state's investment may take the form of preference shares and/or ordinary shares and the state may where appropriate participate on an underwriting basis," said a statement from the Irish government.
"In principle, existing shareholders will be expected to have the right to subscribe for new capital on the same terms as the government."
The government said its objective was to ensure the long-term sustainability of the banking sector in Ireland.
The Department of Finance said a key principle of the scheme would be to secure the interests of the taxpayer through appropriate terms and return on the investment.
State injection of funds will be assessed on a case-by-case basis.
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