Fine Gael today claimed the Government was starting to crack under pressure on the issue of creating the National Assets Management Agency (Nama).

Party deputy leader Richard Bruton said an "uncertain" Minister for Finance Brian Lenihan was seeing his plan crumbling after he showed some signs of "finally accepting one of Fine Gael's primary criticisms of Nama, namely the unfair burden of risk being shouldered by the taxpayer".

"The Government is beginning to crack on Nama. By conceding to the idea of explicit risk-sharing between bank investors and taxpayers in the Nama legislation, I hope Minister Lenihan is finally yielding to pressure from Fine Gael, independent economic commentators and the ECB to ditch the crazy idea of deliberately over-paying banks up-front for their developer loans, which flies totally in the face of risk sharing," the Fine Gael finance spokesman said in a statement.

Mr Bruton said the best available solution to the banking crisis was setting up a "credible mechanism" to get credit flowing immediately to business. "The new Central Bank Governor, Professor Patrick Honohan, and Colm McCarthy have both expressed scepticism that Nama will achieve this".

He said there was a need to abandon the "discredited concept" of long term economic value, and to protect the public purse by ensuring private investors take the "lion's share" of the risk and responsibility for working out the toxic assets.

"A growing chorus of mainstream experts now support Fine Gael's longstanding contention that certain classes of bond investors (owners of subordinated bonds) should be exposed to toxic loan losses before the taxpayer," Mr Bruton said.

He said although there would be no painless solution to the economic crisis, Fine Gael's model for a "good bank" could save the public from billions in losses compared with the Nama proposal.

"The Irish Government now needs to take courage and ditch the Nama approach. It must stand up for the Irish people, and drop this bogus notion that imposing pain on bank investors risks a flight of capital. The opposite is the case. Nobody wants to invest in a country whose Government so clearly fails to defend the national interest," Mr Bruton said.

Mr Lenihan yesterday indicated an element of "risk sharing" between the banks and the taxpayer will be introduced to the scheme for the proposed Nama.