Irish banks summoned a number of leading developers into meetings last week to discuss their debt situations and get an overview of the extent of the downturn of the property market. The move is seen as a signal that banks will finally begin to write down the value of property loans to market value which will send a number of builders and developers to the wall. "It's like a bomb has gone off and it'll be six months before you know who's dead because everybody's bleeding," said one senior source.

The banks are also understood to have invited the few cash-rich landowners and developers for informal discussions on potential joint ventures on distressed sites that may be repossessed.

"There's a realisation they might be better off taking the money rather than sitting on it," said one source. "It's all been done on a friendly, friendly basis and they'll decide on the mechanism of any joint ventures afterwards. It's been less than a week since this started." A second source confirmed being invited to similar meetings. Banks are also understood to be withdrawing term sheets they had offered to developers. Term sheets are indicative terms that a bank is willing to offer a customer for a loan.

The moves come after the Sunday Tribune revealed last week that bankers had deliberately avoided getting formal valuations of commercial properties because the drop in their value was so much they would have had to bring the cases before the banks' respective audit committees.

However, the end of their respective financial years means they must now begin writing down the value of those loans as their auditors will not be allowed to sign off on historic valuations that do not reflect market reality.