THE NATIONAL Asset Management Agency (Nama) will pay about [euro]54 billion to the banks for property-related loans which have a face value of about [euro]77 billion.

The banks will have to absorb the difference and have been told to raise private investment to offset the resulting losses.

The Government has indicated that if the banks cannot raise the money themselves, it will invest the capital. This could lead to the State taking up to 70 per cent of Allied Irish Banks (AIB) and 30 per cent of Bank of Ireland.

But market sources said the bank might be able to avoid further Government investment by raising money from private investors or through the sales of assets. Shares in both Bank of Ireland and AIB rose strongly last night on the New York Stock Exchange, after the Irish markets closed. AIB was up 26 per cent and Bank of Ireland rose 19 per cent.

Minister for Finance Brian Lenihan told the Dail yesterday that the State would on average pay 30 per cent less than the face value of the bank loans.

However, last night Fine Gael and Labour claimed the main banks, AIB and Bank of Ireland, would escape with a significantly lower discount because of the scale of the problem at the nationalised Anglo Irish Bank skews the average figure provided by the Minister.

Figures provided by Davy stockbrokers, a former subsidiary of Bank of Ireland, supported the Opposition parties' claims last night. The firm estimated that the discount applied to Bank of Ireland could be as low as 24 per cent, while AIB would face a discount of 29 per cent.

AIB said in a statement that it expected its discount to be less than the aggregate figure of 30 per cent.

The Minister said that Nama would purchase [euro]28 billion in loans from Anglo Irish, [euro]24 billion from AIB, [euro]16 billion from Bank of Ireland, [euro]8 billion from Irish Nationwide and [euro]1 billion from the EBS.

The Government estimated the current market value of the loans to be [euro]47 billion, representing an over-payment of [euro]7 billion, which Mr Lenihan said was an allowance covering the long- term economic value.

Nama would need a rise in property prices of less than 10 per cent from current levels over 10 years to break even, he said. In that case property prices would still be 45 per cent below their value in late 2006.

"There is no assumption in our work that peak property prices must and will be repeated," he said.

The Government also revealed details of its mechanism to spread the risk of part of the overpayment from the taxpayer to the banks and building societies.