Bailout talks: Irish leader resists resign call over cuts and IMF deal

After day one of formal bailout talks in Dublin yesterday, a 150-page four-year rescue package was being put to the test by an emergency mission from Brussels and Washington.

But as the International Monetary Fund (IMF) and European delegation inspected the state's financial black hole, Mr Cowen faced deepening anger.

"The government has a job to do here. We have a four-year plan that we are finalising which we are required to do," the Taoiseach said.

The draconian 2014 budget road map is expected to be published on Monday with significant reforms to the tax system, new levies in property and water on the cards and social welfare being cut.

But ministers have taken a hard line with the sacred cow of corporation tax, which is the lowest in any major European economy, and insisted the low 12.5 per cent rate is non-negotiable.

The 32-strong team from the IMF, European Central Bank and European Commission will follow with its assessment of the crippled economy.

One week after Brussels officials began briefing that the IMF and ECB was on its way to Dublin, Mr Cowen yesterday conceded a bailout loan was on the table, and he described the negotiations as open and constructive.

Governor of Ireland's Central Bank Professor Patrick Honohan is the only senior official or minister to offer an idea of what the IMF/European mission may bring – a pot of cash running to tens of billions.

Mr Cowen and his senior cabinet colleagues have faced intense attacks in the last 48 hours, with the Labour Party declaring Ireland had suffered its blackest week since the Civil War in the early 1920s.

The Taoiseach is also sweating under a razor-thin majority as a by-election looms next week and with budget 2011 less than three weeks away.

Labour's Eamon Gilmore branded the Fianna Fail-Green coalition government "demoralised, discredited and politically dishevelled". "Any government in any other democratic country that had laid waste to an economy in the way Fianna Fail has and delivered the country into the hands of the IMF would now be long gone," Mr Gilmore said.

Enda Kenny, Fine Gael leader, lashed out at the IMF's presence in Ireland for the first time in its history

Health minister Mary Harney denied she felt shamed to be part of a government in talks with the IMF. "If we have to get contingency arrangements and borrow money, that money will be paid back. This country has the capacity to pay back that money," she said.

IMF officials, including banking experts and auditors were widely expected to make a quick decision on the government's budget plans and the need for a rescue.

Talks are focusing on the planned 6 billion euro (5.1 billion) Budget savings due on December 7 and the four-year 15 billion euro (12.8 billion) savings plan to be announced next week.

It is understood European number-crunchers have been in Dublin examining Irish files for several weeks while experts from the US set up camp in the Central Bank on Wednesday.

In an attempt to bolster his position Mr Cowen said European allies have given their support for his economic policies.

One avenue being explored is so-called substantial contingency capital, or "CoCo", as it has become known in the banking world. Money would be borrowed from the IMF and the EU, with other bilateral funds paid into a pot, in effect creating a massive cash buffer for the banks in the event of another black hole.

The loans would be guaranteed by an elaborate share scheme triggered if the banks' finances hit a red alert mark.