President Mary McAleese has called for a meeting of the Council of State to examine new laws covering the multi-billion euro bailout and the banks.

In an unusual move, the President is convening the body on Tuesday, made up of the country’s most senior serving and former office-holders, to discuss the Credit Institutions (Stabilisation) Bill rather than simply signing it into law. It advises the president on whether a law is constitutional.

But the president alone will make the decision on whether to refer the legislation to the Supreme Court after the meeting.

The Bill details new laws to oversee the controversial €85 billion bailout from Europe and the International Monetary Fund.

The Government plans to draw down €10 billion initially to pay into banks, with another €25 billion set aside as a contingency fund.

The radical rules will impose so-called burden-sharing on global money markets, with some subordinated lenders forced to take a hit on loans made to Irish banks.

The Department of Finance said the legislation allows the Minister to issue directions or prevent actions to support the Government’s banking strategy and to transfer assets and liabilities to facilitate restructuring.

It will also set in stone how the Government can make subordinated liabilities orders, on a case-by-case basis and under particular conditions, to achieve burden-sharing with international lenders.

Finance ministers will be given the power to parachute special managers into banks to oversee reforms.

The Bill will also underpin Mr Lenihan’s pledge that much-needed money will only be given to Allied Irish Banks if the controversial €40 million bankers’ bonuses are scrapped.

The Dáil passed the legislation on Wednesday by 78 votes to 71, despite being rejected by the Opposition. It all passed the Seanad yesterday.

President McAleese signed the Criminal Justice (Amendment) Bill 2009 and the Defamation Bill 2006 into law last year after referring them to the Council of State.

PA