The UK has offered to make a direct bilateral loan to the Irish Republic in addition to contributing to EU and IMF loans, the BBC has learned.

Sources in the UK government say it wants "to help a friend in need".

Although final figures will not be known for some days, BBC political editor Nick Robinson believes the UK will contribute around £7bn in total.

The Irish prime minister has confirmed that the Republic of Ireland and the EU have agreed a financial rescue package.

Chancellor George Osborne is expected to make a statement about the UK commitment in the Commons on Monday.

Our political editor said Mr Osborne and Prime Minister David Cameron had taken a decision at last week's G20 summit in Seoul that the UK would be ready to promise £7bn in loans as part of any Irish rescue plan.

The cost of the direct UK loan to the Republic is expected to be "in the low billions" and will be in the form of contingency loans which the government expects to see paid back.

Sweden has also agreed to make a direct loan to the Irish.

BBC business editor Robert Peston said the Irish Republic's economy was important to the UK economy as it received a substantial amount of British exports and its banks played a big role in Northern Ireland.

Our editor said the Royal Bank of Scotland had loaned £53bn into Northern Ireland, which was insured by taxpayers as RBS is a semi-nationalised bank.

So if the Irish economy were to implode, that would generate big losses for RBS and the taxpayer, he said.

He added: "Ireland's banks are huge players in international markets, that is the weakness of Ireland. If they were to go down, the ripples through the financial system would be extremely serious for all of us."

But former Conservative minister and Eurosceptic MP John Redwood expressed his concern at the move.

"When we hear about it in the House, I'm sure many of us will want to know why, how much, how long are we out of the money, what are the prospects of being repaid, what is the interest rate," he said.

"Of course this will be money we have to borrow ourselves, because we don't have any money. All the money we're spending on top of traditional programmes is borrowed."
Celtic Tiger

On Tuesday, Mr Osborne said the UK was "ready to support Ireland" in achieving economic stability, if it asked for help.

He said it was in the UK's national interest that its neighbour had a successful economy.

"Britain stands ready to support Ireland on the steps it needs to take to bring about that stability," he said following a meeting of European finance ministers

Taoiseach Brian Cowen said on Sunday that the amount and terms of the overall rescue deal would be negotiated in the coming days with the EU and the IMF.

Irish Finance Minister Brian Lenihan said the amount would be less than 100bn euros (£85bn).

EU Finance Commissioner Olli Rehn, speaking in Brussels, said the loans would be provided to the Irish Republic over a three-year period.

The global financial crisis has dealt the Irish Republic a hard blow.

Once known as the Celtic Tiger for its strong economic growth - helped by low corporate tax rates - a property bubble burst, leaving the country's banks with huge liabilities and pushing up the cost of borrowing for them and the government.

http://www.bbc.co.uk/news/uk-politics-11807769

*stereotype* They'll only drink it! *stereotype*

Ultimately this will be failure because Irelands debt load is far too high to be sustainable even at the low rates on offer to the Irish. All this will do is kick the problem down the road, until even everyone else realises that it is a failure. Ireland has still not had a repossession problem but it will. When that happens the losses at the banks will finally have to be accepted. Ireland will still have to default and the UK will lose the billions loaned to Irish banks. All this is in reality is a bank bailout to protect the banks of the other countries so that they can get through the next elections where ever they occur.

RBS have over £50billion lent over there. Nice work again.

We're already loaning via the EU and IMF, how on earth can they try and sell this additional loan when they're slashing spending here?

The Irish people don't want this, their Government has let them down and now the ministerial cars are running them over to boot clicky

The government here are not acknowledging the fact that many of the banks are probably insolvent and the rest would be because of the links to the problem banks. I still feel that refusing to bail out the banks and forcing all creditors to accept very heavy losses is the best long term option. Otherwise any growth will be minimal as everyone is trying to clear debts, so spending will be low and you have permanent high unemployment. Though a lot will discover the impact of the benefit cuts when they become unemployed. We will have a long stagnant period just like the Japanese. Ireland could have two or more decades of stagnation.