The Department of Finance has defended its decision to claim that important documents given to the IBRC inquiry were confidential.

It says it would have been legally wrong not to tell Justice Brian Cregan that the documents contained confidential customer information.

Justice Brian Cregan says his legal investigation has reached a legal brick wall partly because the Department of Finance claimed some of its documents were covered by confidentiality.

But in a lengthy statement this evening the Department of Finance said it has cooperated fully - and said it was right to give that warning to Judge Cregan's inquiry.

It says some of the documents given to the inquiry originally came from "various sources outside the Department". It says this information was confidential at the time it was received - and had to REMAIN confidential at the time it was sent onward.

It says that as a witness to the inquiry, the Department would have "incorrect as a matter of law" if it didn't assert that this information was still confidential.

But, it says, it still believed Judge Cregan would be able to consider the documents in evidence - and only found out otherwise last Thursday.

Fianna Fáil leader Micheál Martin said this evening that the situation is "a complete fiasco and it is not helped that the Taoiseach is not being completely honest with the people.

"He says on the one hand he is completely committed to a full and independent investigation and on the other seems unaware that there has been a problem for months that was not tackled by him or by the Attorney General," he said.

“The Taoiseach needs to get a handle on this inquiry and take the necessary action to ensure that the inquiry is not impeded because of legal privilege arguments between arms of government and State-owned and paid entities," Mr Martin added.

Earlier today, the Taoiseach says he would be breaking the law if he engaged with the Department of Finance about what they have or have not provided to the inquiry into write-offs at IBRC.

Mr Martin accused Enda Kenny of using Chinese walls to deflect from the situation.

The Department has provided un-redacted documentation in relation to the sale of Siteserv and other write-downs at the former bank, but has also noted the documents are covered by confidentiality and privilege.

Enda Kenny told Deputy Martin he cannot interfere in the situation because to do so would be against the law:

"You are asking me to engage with the Department of Finance to find out answers to questions that you are asking me, that is prohibited under the commission of investigation."