The Department of Finance has said it is a 'disgrace' that Irish Nationwide Building Society spent money on a watch for former chief executive Michael Fingleton to mark his retirement.

'It is a disgrace that the building society spent funds in this manner, especially given the cost to the taxpayer from INBS's failure,' the department said.

The new Irish Bank Resolution Corporation - the new name for the entity created when Irish Nationwide was merged with Anglo Irish Bank - is seeking the return of the watch.

The department said IBRC was also continuing to seek the repayment of a €1m bonus payment made to Mr Fingleton. It urged Mr Fingleton to live up to his commitment to return the payment.

'The Government has continued to seek this repayment as in its view it should never have been made to Mr Fingleton,' the department said.

Newspaper reports said the watch was worth €11,500, but its cost to the building society was €21,150 as Irish Nationwide paid tax of €9,650 that would otherwise have fallen due to Mr Fingleton on his receipt of the gift.