The AIB succession race has run into a political impasse after coalition partner Green Party this weekend threatened to veto the appointment of any insider to head up Ireland's largest bank.

With no political agreement in sight on who to appoint as the new AIB chief executive, the current holder of the post Eugene Sheehy will now be staying on for much longer than originally envisaged.

Ahead of its special party conference next month, the Green Party is preparing to step up its opposition to approving any existing director to run AIB. In February, the party did not block the appointment of insider Richie Boucher to run Bank of Ireland, which like AIB received €3.5bn of taxpayers' cash.

"The appointment of an internal candidate would send out the wrong signals," Dan Boyle, the party's finance spokesman, told the Sunday Tribune. "It would be a wrong decision to go for an insider," he said.

Colm Doherty, 50, head of Capital Markets, the AIB division based in the Dublin docklands, for the ten years and an AIB main board director for the last six, is widely seen inside and outside the bank as the leading contender, after external candidates failed to make a strong early showing.

Pressure will likely build on the government's AIB board appointees -- Dick Spring, the former Labour leader, and Dublin Airport Authority chief Declan Collier -- to come up with a solution to the impasse.

This will be Doherty's last chance of securing the top job after he unsuccessfully competed with Sheehy five years ago. After Sheehy, Doherty was the best paid executive at AIB in Dublin for years -- his pay packet, with a €1.2m bonus, swelled to just short of €2m at the height of the boom in 2006. Supporters of Doherty in the bank say that AIB without the appointment of a new chief will be unable to fill the vacant position of finance director and that a decision therefore needs to be taken quickly.

But the government, which is tracking the recruitment process, will be in no hurry to appoint a successor.

Finance Director John O'Donnell, retired from the board at the end of last month. But Sheehy, who had also announced his intention to go last April, said he would stay on until his successor was appointed.