It is in Britain's national interest that its neighbour has a successful economy, the UK chancellor said.

Teams from the International Monetary Fund, European Commission and European Central Bank will travel to Dublin on November 17 to consider a bail-out.

Irish finance minister Brian Lenihan indicated it may need a financial lifeline from the European Union and International Monetary Fund.

Speaking on RTE radio, he said: "The system has remained vulnerable in the light of continuing international uncertainties and we have to support the system and stabilise the system and if that requires help from our partners in the common currency area then we will have to avail of that help."

Ireland's economy had become too dependent on a property bubble that left whole estates empty. That was pumped up by reckless lending from Irish banks - which are now thought to need a massive injection of new funds to protect them against future losses.

Eurozone finance ministers agreed on Tuesday to send a joint EU-IMF mission to Ireland to prepare for a possible bail-out of Irish banks, in an effort to prevent the crisis spreading to other Eurozone countries.