Irish Life and Permanent, Bank Of Scotland, Rabobank and Northern Rock have all been mooted as potential purchasers. Irish Life and Permanent chief executive David Went has already indicated that IL&P would run the rule over its smaller rival if it is put up for sale.

Davy Stockbrokers banking analyst Scott Rankin said Irish Nationwide "could be worth in excess of 1.5bn". He said it would be more likely to interest a bank such as Bank Of Scotland, given its strong commercial lending focus.

"You're really looking at a commercial lending bank with a sizeable residential book and 50 branches tacked on, " he said.

National Irish Bank parent Danske Bank is also a potential suitor. Irish Nationwide's branch network could be an attractive proposition as it attempts to make inroads in Irish retail banking.

The Cabinet's decision to sign legislation allowing Irish Nationwide to demutualise paves the way for windfalls of up to 15,000 for the society's 120,000 eligible members. They could get the money next year, if the society sells for estimates of over 1.5bn. Many so-called carpet-baggers have jumped on the gravy train, stumping up 20,000 each to open share accounts to capitalise on any windfalls.

Last month, at the society's AGM, members shot down a resolution to seek plc status. It was rejected by 81% of voters.

Many members argued that opting to continue as a plc would make it less likely that the building society would be bought by a single buyer.

There has been some concern that INBS members could see their windfalls dented because of an unsuccessful legal battle with the ombudsman, Joe Meade. Earlier this year, Meade instructed INBS to pay back redemption penalties to a customer who paid off his mortgage early.

Meade called the charges "unlawful" and "invalid".

The building society unsuccessfully challenged the ombudsman's decision in the High Court. Other customers who have been charged similar penalties may now be able to make claims against the building society, which could reduce the amount of money available to current members in a sale.

The Financial Regulator has said it is "considering the implications of the settlement between the [ombudsman] and Irish Nationwide". The ombudsman has the power to award up to 250,000 in individual cases, and can also force institutions to change their practices.

Irish Nationwide chief executive Michael Fingleton is one of the best-paid Irish bank bosses. He took home 1.65m last year, according to the INBS annual report.

With a salary of 671,000, a 500,000 bonus and pension contribution of 375,000, his pay is almost three times that of the chief executive of EBS, the only other building society left in the country.