The UK has committed to help the Irish economy, with support through both the IMF and a bi-lateral loan expected together to be worth some £7bn.

Chancellor George Osborne told the programme that it was in the UK's "national interest" to provide financial help to the struggling economy.

"Ireland is a friend in need and we're here to help," he said, arguing that the country was one of the UK's closest economic neighbours, sharing close trade links and a land border.

Addressing the future of the euro, of which he is not a supporter, Mr Osborne added that now was not the time to negotiate a permanent solution to the currency's woes.

"It is in everyone's interest that we make the euro work. 'I told you so' is not much of an economic policy," he said.

Nevertheless, he said, it was "a matter of regret" that British taxpayers were again footing the bill for the failure of the banking system.

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