Ireland today extended its depositor guarantee to the customers of British-owned banks in the republic.

Brian Lenihan, the Finance Minister, said he would extend the controversial €400 billion (£316 billion) guarantee scheme to foreign-owned banks with significant operations in Ireland.

Customers of Royal Bank of Scotland's Ulster Bank operation and HBOS's Irish branches are covered by the widened depositor promise.

Dublin provoked fury from some British banks ten days ago when it included only the depositors of six Irish-owned banks in its depositor guarantee. It was accused of disadvantaging British and other non-Irish banks, whose customers started emptying their accounts and putting the proceeds in the six favoured Irish banks.

Customers of First Active, Belgian-owned IIB and Postbank, partly owned by Belgium's Fortis, are also now included in the guarantee, which is in place for two years for all personal deposits of any size.

The European Commission has yet to approve the guarantee, which some banks argue breaches competition rules.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts