Dublin has pumped 11 billion euros of capital into its banks, nationalised Anglo Irish Bank and introduced a blanket guarantee for bank liabilities, and now hopes the National Asset Management Agency will complete the clean-up of the sector.

"The Irish economy is suffering from a very sharp liquidity crisis which NAMA is designed to counteract," said Kevin McConnell, head of research at Bloxham Stockbrokers. "We do face a unique situation here."

Finance Minister Brian Lenihan said on Thursday he aimed to appoint NAMA's board later this month and start transferring the biggest loans to NAMA within "a matter of weeks." The government hopes to move all the assets with a combined book value of 77 billion euros by around the middle of 2010.

Clarity over NAMA will allow Bank of Ireland and Allied Irish Banks, in which the government already holds indirect 25-percent stakes, to look for fresh sources of capital to plug the hole left by the asset transfers.

NAMA will hold the loans via a special purpose vehicle owned jointly with private investors, allowing it to account for NAMA's 54 billion euro debt outside the government's balance sheet at a time when national debt is rising sharply already.

Opposition parties nevertheless accused the government of engaging in the biggest gamble of Ireland's history.

"NAMA is fundamentally flawed, will do nothing to get credit flowing to small business and it will do nothing to support the retention or creation of jobs," opposition party Fine Gael said.

The bill will now be sent to President Mary McAleese, who rarely objects to legislation and who is expected to decide between Tuesday and Thursday of next week whether to sign it or send it to the courts for constitutional review.

It also needs approval from the European Commission, which has previously indicated it wanted NAMA to be set up swiftly. Dublin has already started recruiting lawyers and property valuers to have it up and running as soon as possible.

Shares in Bank of Ireland finished down 1.95 percent and Allied Irish Banks closed 2.34 percent weaker in a wider Irish market that was down 0.1 percent.

"The market will first of all focus on the start of the NAMA transfer process, and secondly at what European Union looks for," McConnell said.

(Additional reporting by Padraic Halpin; Editing by David Cowell)