The chairman of the bank formerly known as Anglo Irish Bank has confirmed that a payment of €750m will be made tomorrow to unguaranteed bondholders. Alan Dukes warned of serious implications if the transaction did not go ahead.

Mr Dukes, now the chair of the Irish Bank Resolution Corporation, said the payment had to go ahead as the bank and the bondholders had entered into a valid commercial contract.

He said the consequences if the bank did not follow through would not be good, adding that it could trigger cross-defaults and have serious implications for the Irish banking system and for the sovereign borrower.

Earlier, opposition TDs Mary Lou McDonald of Sinn Féin and independent Stephen Donnelly called for the payment to be stopped. The identities of the bondholders are not known.

Anglo's former finance chief arrested

The former finance director of Anglo Irish Bank, Willie McAteer, has been arrested.

Mr McAteer was arrested at 8am this morning at his Dublin home by detectives from the Garda Bureau of Fraud Investigation.

The 60-year-old is being detained on suspicion of false accounting at Irishtown Garda Station under Section 4 of the Criminal Justice Act and can be questioned for up to 24 hours.

This is the second time the former Anglo finance director has been arrested in connection with the ongoing investigation by the Bureau and the Director of Corporate Enforcement into alleged financial irregularities at Anglo Irish Bank.

Three files have already been sent to the DPP in connection with the overall investigation

The warrant for Mr McAteer's arrest was granted by the courts last week after a garda above the rank of superintendent gave sworn evidence to a judge as to why they wanted to question the former finance director a second time.

He was first arrested in March of last year, questioned and released without charge.

Under the Criminal Justice Act, a person can be arrested again for the same alleged offence if further information has come to the knowledge of the Gardai since the release as to that person's suspected participation in the offence for which his arrest is sought.