Taoiseach Enda Kenny has renewed his political support for Minister of State John Perry after he and his wife reached a deal with Dankse Bank to restructure a €2.47 million debt.

Mr Perry wants to stay in office, although senior figures in Government circles have argued that his credibility as Minister in charge of small business has been seriously damaged by the affair.

Court records suggest the Sligo TD has been engaged in prolonged and intensive talks with Danske since January 2012, less than a year after he took office.

At the same time, he maintained a tough line on the banks generally in his public remarks .

Mr Kenny’s spokesman said a statement last evening from Mr Perry had been “noted”. When pressed as to whether the Taoiseach retains confidence in the Minister, the spokesman said “yes”.

A Commercial Court judgment against the couple in July had been stayed until yesterday to allow time for a final attempt to resolve the matter. At 6.30pm, a statement from the Minister said the deal was done.

'Confidential'
"John Perry TD has confirmed that he has reached an agreement with Danske Bank. The details of the agreement between Mr Perry and his wife and the bank are confidential," it said.

“Mr Perry has confirmed that all his tax affairs have been and remain up to date. Mr Perry has confirmed that he will be making no further comment on the matter.”

Danske’s spokesman declined to comment on the deal and the Minister’s spokeswoman would not answer questions about the new arrangement. The bank is understood to have had sight of the statement before its release. The deal does not involve a settlement of the debt. It is understood the agreement includes an extension of loan maturities and the sale of assets.

The judgment against them remains in place and a receiver, who has seized property assets from the Minister, will continue his work. The arrangement is in line with other agreements reached between Danske and defaulters, it is believed.