The government could be facing fines from Europe over failing to set the VHI on the same footing as other insurers.

A deadline to authorise the VHI with the Central Bank by the end of the year - including making sure the insurer has sufficient capital reserves - will not now be met.

The European Court of Justice rapped Ireland on the knuckles more than two years ago for not putting the VHI on the same footing as the other insurers here.

The country's biggest health insurer would effectively fail solvency requirements unless it got a major capital injection from the taxpayer of hundreds of millions.