Mohamed El-Erian , chief of PIMCO

The man tipped to be the next boss of the IMF has predicted that the eurozone will shrink to only four countries, with Ireland and other so-called peripheral nations possibly adopting a new devalued common currency.

Mohamed El-Erian , chief of PIMCO, the US investment giant which looks after €900bn in assets globally, said that the eurozone would include only Germany, Netherlands, France and Austria because the debt overhang of Ireland, Greece and the other states was too great.

He told CNBC that Greece and Ireland were the most vulnerable in Europe "followed by Portugal and Spain, and then Belgium and then Italy", unless the European authorities dealt with debt in these countries.

The comments come as other market sources said international debt markets would likely only give Portugal a short respite through Christmas.

New figures likely to be published later this week will show the huge amounts of cash pumped into the Irish banks by the European Central Bank and the Irish Central Bank, as deposits flowed out in November.