Taoiseach Enda Kenny has said the Cabinet agreed yesterday to bring the investigations surrounding the Irish Bank Resolution Corporation to a different level.

He said there had been a lot of hysteria about recalling the Dáil for something that was outside its control.

Mr Kenny said he had always been a staunch defender of the right of elected representatives to be able to speak their minds and, he said, the judge had cleared and clarified that issue.

He said the Cabinet had a very comprehensive meeting to bring this to a different level. It is the right thing to do and allows for a judge to deal with the issues, about which there is no evidence of wrong-doing.

He said Minister for Finance Michael Noonan wanted to bring the information around the allegations as quickly as possible with the Special Liquidators report, but events had overtaken this.

It was right and proper now to have a Commission of Investigation, Mr Kenny said.

Asked if the public should have concerns over the extent of Denis O'Brien's influence in Irish society, he said there were rules governing the ownership of media outlets and publications and that was a matter for the Minister for Communications.

"There are legislative conditions set down here. I wouldn't comment on any individual in particular. But I do note that the Justice in his decision did say that any individual is entitled to privacy, but that clearly in certain circumstances the public good can override the requirement where that might apply", the Taoiseach said.

Fianna Fáil leader Micheál Martin has said the Mr Noonan needs to come before the Dáil to comprehensively explain what has happened to all of the information and documentation within the Department of Finance in relation to IBRC.

He told RTÉ's Six One News the terms of reference for the Commission of Investigation need to be broadened to include the relationship between the Department of Finance and IBRC, governance in the bank and its wealth management unit.

Mr Martin said that in his original question to the Minister, the Minister told him that the first minutes in relation to IBRC came after 2012, and that they had not received the minutes in connection with the Siteserv sale.

Deputy Martin said that, in an email to him last night, Mr Noonan apologised to him saying that information was wrong.

Mr Martin said the Finance Minister's original reply in the Dáil is mystifying.

Earlier, Mr Martin said the Government made a major political error in setting up its initial inquiry into certain transactions and activities by IBRC as there were clear conflicts of interest.

Taoiseach talking out of both sides of his mouth - McDonald

McDonald critical of Taoiseach over IBRC investigation

Reacting to the Taoiseach's comments, Sinn Féin's Mary Lou McDonald said "having been in hiding and having said nothing in the past week, the Taoiseach has come out to say very little that is anyway helpful."

The Sinn Féin deputy leader said: "It seems to me he is talking out of both sides of his mouth. He was forced under pressure to establish a Commission of Investigation but he still seems to try to minimise the importance of the issues at play."

She added Sinn Féin "are very concerned that we get the terms of reference right. We are concerned that the relationship between the Department of Finance and IBRC, and indeed the minister's role in all of this, is fully explored. That has to be part of the terms of reference."

Minister claims decision is not a 'step down'

Earlier, Minister of State Simon Harris said the decision to establish a Commission of Investigation is not a "step down" by the Government.

Speaking on RTÉ's Morning Ireland, Mr Harris said Michael Noonan's decision to establish the commission was "a prudent move" once Mr Noonan recognised that the case had escalated.

However, he stressed there was no evidence of wrongdoing.

Yesterday, the Government signed off on a proposal to establish the Commission of Investigation.

The inquiry will examine up to 40 transactions where there was a capital loss to taxpayers of €10m or more.

Mr Harris said the commission was the best way to address issues of public concern.

He denied the participation of KPMG's Kieran Wallace in Denis O'Brien's injunction case against RTÉ undermined Mr Wallace's independence as IBRC liquidator.

Mr Harris said: "Already, Minister Noonan had put a High Court judge in place to oversee any perceived conflicts of interest."

He said it had "no bearing" on the decision to order a Commission of Investigation.

"There was a structure in relation to the liquidator. The minister viewed the liquidator as best positioned because the liquidator had access to every single piece of paper - we wanted to get information as quickly as possible."

He said there was always the possibility of arriving at a Commission of Investigation.

However, Mr Harris appeared to contradict another Fine Gael minister on the issue of Mr Wallace’s role as IBRC’s special liquidator and KPMG partner.

Minister for Health Leo Varadkar said one of the reasons the Government ordered the Commission of Investigation was because Mr Wallace was involved in litigation.

Speaking on Newstalk Mr Varadkar said: "There is heightened public concern and new allegations and then there is the fact that Kieran Wallace was involved in litigation.

"What that would have meant is that if the inquiry had gone ahead as planned (a review by KPMG), no matter what the outcome was, people would dispute it. People would say there is a conflict of interest," he added.

Assertions over timeframe rejected

Mr Harris also rejected assertions by Renua's Lucinda Creighton that the timeframe for the publication of the inquiry meant debate on the issue would cease.

Mr Harris said Ms Creighton had published a piece online recently calling for a "banking inquiry style" investigation into IBRC.

He said he presumed the Minister for Finance will continue to answer questions in relation to his role in the Department of Finance in the Dáil while the inquiry is ongoing.

Mr Harris said Mr Noonan had no knowledge of the sale of Siteserv prior to the deal being concluded on 15 March as the board minutes were not brought to his attention before 20 March.

Earlier Ms Creighton criticised the proposed cut off for investigating certain IBRC transactions with a minimum loss of €10m saying the figure is too high.

Also speaking on Morning Ireland, Ms Creighton said whistleblowers have contacted her with details of other "significant and substantial transactions", that were less than that amount.

She also expressed concern about the length of time the inquiry will take. She is doubtful that the report will be published before December, as has been envisaged, and said she believes it will take us beyond the next General Election.

Ms Creighton said that, as has been proven with the Fennelly Report, these inquiries shut down debate and lead to no accountability.

Mr Noonan published the draft terms of reference for the commission yesterday.

He said the commission will examine alleged preferential interest rates given to IBRC clients as part of its terms of reference.

He said any interest rate differential that resulted in a loss of €4m will be examined. The figure was chosen to catch big deals but leave out smaller deals.

The commission will have the power to examine all transactions from when IBRC was set up in January 2009 up to the appointment of Special Liquidators in February 2013.

The commission must report back by 31 December.

Mr Noonan said the inquiry was not about Denis O'Brien but related to deals where there was a perceived conflict of interest.

'Lost files' found, says minister

The minister also said his department had found some lost files relating to IBRC board meetings.

These do not include the specific meeting where the sale of Siteserv was decided, however, the sale was mentioned at one monthly meeting.

Mr Noonan said this meant he has to correct the Dáil record and he would do so on Tuesday. However, he said this did not change the substance of the account of who knew what and when.

He also said it was a coincidence this was discovered yesterday and it was not connected to the Commission of Investigation.

Independent TD Stephen Donnelly has said many questions will be put to the Minister for Finance over the coming weeks on political governance, with regard to the IBRC.

Speaking on RTÉ’s Today with Sean O' Rourke, he said there had been a demand for a commission of inquiry for a long time with the Opposition and members of the public wanting this investigation.

He said the Government has changed its position because "independent TD Catherine Murphy has managed to put the facts into the public domain".

He added that he believes information was withheld from the Dáil and not shared when it should have been shared.

"It should have been shared in the context of the liquidation of IBRC."

He believes the investigation will take a long time and that Ms Murphy is likely to bring more information forward.

Analysis: Political Correspondent David Davin-Power

What you see is the Government trying to nip this controversy in the bud. The last thing they'd want is the Siteserv/IBRC row to fester and would prefer the focus would be on an improving economy with an upcoming General Election.

That focus has been somewhat clouded by the admission that Michael Noonan's department had, all along, the minutes of the IBRC board meeting that discussed the sale of Siteserv.

That is being seized upon by Micheál Martin, along with the FOI documents, to bolster Mr Martin's claim that the proposed investigation has its roots in information the Government had in its possession all along.

It is my understanding that independent TD Catherine Murphy is quite happy with the terms of reference of the inquiry, so it does not look like any more hand grenades will be thrown into this controversy.

However, it remains to be seen how Michael Noonan weathers the storm about having effectively misled the Dáil. He said it's not a substantial issue but I'm sure that Mícheál Martin begs to differ.