Finance Minister Michael Noonan has confirmed that the proceeds of the stock market re-flotation of AIB next year will be used to reduce the national debt, if Fine Gael is returned to power.

There is intense interest in the markets as to when the IPO - of 25% of the State’s more than 99% holding in AIB will take place - and the minister hinted that it might not happen until next autumn, noting that if that were to prove the case, the bank would have delivered another full and half year results by then, and the value to the taxpayer would rise.

He said the IPO would likely be the largest IPO in London next year and at the most recent €13bn valuation of AIB would raise gross proceeds of at least €3.3bn for the State.

The Minister said the country’s debt to GDP ratio should come down to about 95% next year anyway, prior to further reduction using the AIB proceeds.

Elsewhere in the interview he said that he plans to review mortgage rules for first time buyers.

Mr Noonan told the newspaper that he believes that there's a shortage of starter homes in Dublin and builders say the regulations by the bank are too restrictive.

The Minister says market conditions are changing and he's being told by the construction industry that aspects of it are inhibiting starter homes.

Minister Noonan has called on the Central Bank to review the mortgage caps for first-time buyers - which were introduced 8 months ago - but he says he will accept whatever conclusion the bank comes to.