AIB directors have attempted to present what they see as a compromise proposal to assuage the concerns of Minister for Finance, Brian Lenihan, about appointing insider Colm Doherty as the next chief executive. The proposal involves naming a panel of outside senior managers to fill the senior posts around Doherty.

Meanwhile, a backbench revolt was building over the weekend against any idea of Doherty getting the position and Lenihan backing down. Several Fianna Fail TDs told the Sunday Tribune they did not think Lenihan should sanction a Doherty appointment in any circumstances.

A plan to present a list of names of external candidates to fill senior executive positions, with Doherty installed as chief executive, is understood to have been pitched to Lenihan to help break the impasse over whether AIB should be allowed to appoint an insider to the top post.

Fianna Fáil backbenchers are urging the Minister for Finance, Brian Lenihan, to hold firm against mounting pressure to allow AIB to appoint an internal candidate.

Deputy Sean Fleming said that the decision could prove to be a defining moment in the State's relationship with the banking sector and that it is important that the Government does not bow to pressure from AIB on the appointment.

"The Government has to ensure that this does not happen. If the Government cannot even make that happen, there is no chance of them making anything else happen. This is a test. All the banks have learned is to keep their heads down, take the money and carry on as normal," he said.

His sentiments were echoed by deputy John McGuinness who called on the minister to take a tough stance with the bank. "There needs to be more transparency and accountability in the banks and that can be best realised by appointing someone from outside the current regime. They haven't learned and they obviously don't understand the wrath of the public over this," he said.

And Cork deputy Michael McGrath said that if the minister's preference is for an external candidate then the bank should respect his wishes. "He is acting on behalf of the government who have bailed out AIB and if there is a stand-off, it is the bank which should back down," he said.

However, deputy Ned O'Keeffe defended the AIB board saying that they were best positioned to make an appointment and that it should come from within the Irish banking sector.

Doherty's close supporters maintain that he had the "unanimous" support of the AIB board and that he is the only candidate left in the field for the job.