Irish banks are facing at least another month of deposit flights and instability as they await capital injections from the €35bn being made available under the EU/ IMF rescue package.

The lack of immediate "comfort capital" to bring the banks up to the new regulatory minimum of 12% core capital means the banks remain frozen out of funding markets and at risk of continued deposit flight, sources said.

Initial recapitalisation money is expected to come from the National Pension Reserve Fund (NPRF), which has €14bn in cash reserves and liquid securities. However, the pool of cash and assets cannot be liquidated and deployed until January at the earliest, as the NTMA, which manages the fund, needs "preparatory time" to come up with a plan to realise the value of its holdings, an NTMA spokesman said.

The NTMA has gained a lot of experience in this type of transaction due to numerous recapitalisation cash calls over the last 18 months, the spokesman said.

Analysts and institutional investors have said there is no appetite in the market for putting fresh equity into Irish banks either, leaving only the bailout fund as a source of new capital.

Last week, Bank of Ireland said it planned to raise the €2.2bn it requires by the end of February from internal liability management, existing shareholders and cap markets. Sources said the bank had little chance of persuading shareholders or new buyers to support it, especially after the destruction of value following its successful €2.7bn fundraising last May.

"I can't see them following their cash," said one Dublin bank analyst. "There is still a lot of uncertainty."

If Bank of Ireland is forced to rely on bailout funds for new capital, it is expected to come under majority state ownership, further diluting shareholders who supported it earlier in the year.

Bank of Ireland may get to keep its remaining overseas assets, which include its prized joint venture with the UK Post Office. While the government has said the banks will be forced to shrink further, it is thought that the bank, which is 36%-owned by taxpayers, won't have to sell any more of its divisions. The bank is the only Irish lender to have its restructuring plan approved by the European Commission.

Bank of Ireland said last month the Post Office joint venture was performing better than expected and generating significant deposits.

BOI has already sold its asset management unit, BIAM, and plans to sell its insurance business, New Ireland, and the ICS Building Society.

One institutional investor source said existing shareholders were hanging on for a "meaningful private percentage" in Bank of Ireland if chief executive Richie Boucher can get a good result from the New Ireland sale and any debt buybacks. Analysts believe they can get €650m at most from buying back or swapping junior bonds.