MINISTER FOR Finance Brian Lenihan has referred to the Financial Regulator an e-mail circulated by the son of Irish Nationwide boss Michael Fingleton earlier this week seeking new deposits, citing the protection of the Government's new bank guarantee plan.

The e-mail, received from financial sources in London, was sent by Michael Fingleton jnr to at least one leading global bank saying that, under the scheme, the society "represented the safest place to deposit money in Europe with a AAA guarantee from a country with the lowest national debt to GDP ratio of any AAA country".

The approach by Mr Fingleton jnr, who works in the building society's Wigmore Street office in London, flies in the face of Mr Lenihan's statement to the Dáil on Wednesday night in which he said he was determined to ensure that companies did not engage in anti-competitive practices if they were protected by the guarantee.

Mr Lenihan told TDs: "I will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee."

Asked last night about the e-mail, a Department of Finance spokesman said the Minister had referred the matter to the regulator. Mr Lenihan had "not yet entered into a contract with the institution in question. Practice such as this would not be tolerated."

Outlining the terms of six-month and one-year fixed-rate bonds offered by Irish Nationwide, Mr Fingleton jnr said in his email: "Money in these accounts are guaranteed regardless of the size of deposit and represent the best value in the UK market."

Efforts last night to contact Mr Fingleton jnr on his mobile phone were unsuccessful.

It was also confirmed yesterday that three foreign-owned Irish banks have applied to be included in the State bank guarantee scheme, while a fourth intends to apply for inclusion in the plan which already covers €400 billion of deposits and debts at six Irish-owned financial institutions.

Mr Lenihan has said the guarantee scheme may be extended to include foreign-owned banks with retail operations in the Republic.

UK-owned Ulster Bank Group, the second largest mortgage lender in the Republic, Bank of Scotland (Ireland)/Halifax and Belgian-owned IIB Bank have applied to be covered by the guarantee.

Danish-owned National Irish Bank said yesterday that it intended to apply to be covered.

In Brussels yesterday, the European Commission said it would begin an investigation into the scheme when it received the full details of the plan. The commission said its investigation would focus on whether any State aid was being supplied to Irish-owned banks and whether this aid was being provided in commercial terms that were in accordance with competition law.

If any State aid was judged to be rescue aid, a decision on the legality of the scheme could be given in days. However if the aid was deemed to be restructuring aid then a full investigation would take more than two months.

The British authorities contacted the commission to express concern about the Irish guarantee scheme. The British treasury is worried that the scheme is causing a flight of capital from British-owned banks to the British subsidiaries of Irish-owned banks.

European Central Bank president Jean Claude Trichet signalled yesterday euro-zone rates could soon be cut for the first time in five years after acknowledging that global turmoil had changed the economic outlook substantially.

Mr Trichet opened the door for a possible cut in official borrowing costs in November - or earlier if the financial market crisis escalates - by saying that although euro zone inflation risks had not disappeared, they had fallen.

His comments amounted to a significant change of tone at the Frankfurt-based institution, which raised interest rates only in July to head off inflation dangers.

He hinted at European policymakers' alarm at developments in the US, saying that allowing Lehman Brothers to collapse had "very unfortunate consequences".

The ECB governing council had discussed cutting interest rates before deciding "unanimously" to hold them steady at 4.25 per cent.

The four foreign-owned Irish banks seeking inclusion under the Government's guarantee scheme hold Irish deposits of more than €40 billion between them.

NCB Stockbrokers said that if Ulster Bank were included it would add about €60 billion to the State's existing €400 billion to the six Irish-owned banks and building societies already covered.

The Irish Financial Services Regulatory Authority is understood to be examining the provisions of the Government's guarantee to assess whether Goodbody may fall outside the cover of the guarantee scheme.