Irish bail-out plan in "the UK's interest" - Osborne

He said the UK is making a separate bi-lateral contribution to the rescue package to reflect the fact that it is not in the euro, and confirmed Britain's total exposure is "around" 7bn.

The Irish Government confirmed last night it was seeking the bail-out funds and talks are under way to confirm details of the package negotiated with the EU and the International Monetary Fund. The UK has also offered a separate loan.

Critics of the British part in the bail-out claim UK taxpayers are being asked to save the euro, but Mr Osborne said bluntly: "'I told you so' is not much of an economic policy."

Mr Osborne told BBC Radio 4's Today programme: "What we have committed to do is to be partners, as shareholders in the International Monetary Fund, in an international rescue of the Irish economy.

"But we have also made a commitment to consider a bi-lateral loan that reflects the fact we are not part of the euro and don't want to be part of the euro.

"Ireland is our very closest economic neighbour. I judged it to be in our national interest to be part of the international efforts to help the Irish."

Asked to confirm the 7 billion figure, Mr Osborne replied: "It's around that. It's in the billions, not the tens of billions."