Emergency state aid for three Irish banks was approved by the European Commission today.

Brussels authorised recapitalisations of €4.96bn for Anglo Irish, €2.7bn for Irish Nationwide Building Society and up to €9.8bn for Allied Irish Bank.

A Commission statement said the emergency measures did not prejudice any future decisions expected next year on the restructuring of Allied Irish, or on “orderly resolution” for Anglo Irish and INBS.

The final decision on Allied Irish will depend on the Commission being satisfied that the bank will be commercially viable in the long term without further injections of taxpayers’ money and with a “significant contribution” by the bank’s shareholders, the statement went on.

EU Competition Commissioner Joaquin Almunia said that despite the “profound” difficulties being faced by the Irish banking sector, the Commission would continue applying EU state aid rules to the support Irish banks are receiving.

He went on: "There is no doubt that the Irish banking sector is experiencing profound difficulties at the moment.

"I welcome the Programme for Support that has been put in place for Ireland by the EU and the IMF as it will ensure that action will be taken to deal with the problems of the Irish banking sector.

"However, I would like to stress that the Commission will continue to apply the EU State aid rules to the aid provided to the Irish banks.

"The measures approved by the Commission today for Anglo Irish Bank, INBS and Allied Irish Bank are necessary to ensure that these institutions meet their respective obligations and will help to preserve financial stability in Ireland.

"Both Anglo Irish Bank and INBS will have to submit a plan dealing with their resolution in early 2011, while Allied Irish Bank will have to submit a revised restructuring plan."