Shares in Irelands biggest banks soared on Monday after the Irish government unveiled a €5.5bn rescue package for the struggling sector that will see taxpayers own up to 75 per cent in Anglo Irish Bank.

The investment, announced on Sunday night, is in the form of perpetual preference shares, with the government putting €2bn into each of Bank of Ireland and Allied Irish Banks, both of which have retail operations in the UK, in return for an 8 per cent coupon.