The Irish Independent reports that triumphant Enda Kenny will banish a group of key rebels to the backbenches -- but last night left the door open for defeated leadership rival Richard Bruton to return to the frontbench.

Mr Kenny, whose victory tightened his grip on the party, last night pledged to unify his shattered troops after he narrowly survived a highly divisive leadership contest. He emerged victorious by what was believed to be a margin of six votes following a dramatic meeting of the Fine Gael parliamentary party yesterday.

But the party leadership's refusal to reveal the exact result will reinforce the view that Mr Kenny came within just a few votes of being toppled by Mr Bruton.  Anti-Kenny camp members believe the margin was as narrow as four votes, but the party leader's supporters believe it was 10. Key supporters of Mr Kenny last night felt the party leader would definitely drop a number of frontbenchers who opposed him this week. Among those thought to definitely be on the way out were education spokesman Brian Hayes, immigration spokesman Denis Naughten and tourism spokesman Olivia Mitchell.

And there is also a belief there will be retribution for agriculture spokesman Michael Creed, justice spokesman Charlie Flanagan and foreign affairs spokesman Billy Timmins.

The party's enterprise spokesman, Leo Varadkar, and interim finance spokesman Kieran O'Donnell are also thought to be on the way to the backbenches, although their fate is less certain and they may be offered a reprieve.

Along with Mr Bruton, there may be a way back for communications spokesman Simon Coveney, social welfare spokesperson Olwyn Enright and transport spokesman Fergus O'Dowd. The party's health spokesman Dr James Reilly -- a key Mr Kenny loyalist in the battle -- is regarded as the favourite for the number-two spot, as the party leader will need to retain a strong Dublin presence on his frontbench.

Alan Shatter is expected to be promoted from his current position as children's spokesman, probably to the justice portfolio.

A number of other supporters of Mr Kenny, such as environment spokesman Phil Hogan, community affairs spokesman Michael Ring and chief whip Paul Kehoe, are owed by the leader.

Former party leader Michael Noonan and Oireachtas committee chairman John Perry appear poised for frontbench positions.

With Mr Naughten off the scene, Mr Ring is considered to have a strong chance of a ministry, if the party gets into government.

And an opponent of Mr Kenny's said the rancour in the party leader's closing speech, where he singled out individuals, was a sign there was bad feeling after the heave.

"He really drove it in to them in a nasty personal way. I can't see them ever wanting to work with Enda ever again. It would have been better if there was a stand-up row today to clear the air," the party source told the Irish Independent.

Mr Kenny refused to be drawn on his plans for a new team and insisted he had made no promises on frontbench jobs as he lobbied TDs for their support in recent days.

"I'm not going to make any comment on any appointments now. I did say on more than one occasion that everyone in the Fine Gael parliamentary party has a contribution to make and everybody will be enabled to make that contribution," he said.

A clearly relieved Mr Kenny insisted his friendship with his rival Mr Bruton was not broken.

Confidence

Mr Bruton failed to express confidence in Mr Kenny, but said the issue had now been debated in the party, was dealt with and there would be no more heaves.

He declined to comment on the possibility of serving on Mr Kenny's frontbench, leaving the door open for him to renege on his claim he would not take up a position if the leader survived.

"It's not a decision for today. I'm not going to comment on that. Fine Gael has shown we are a very democratic party.

"I think there's a determination now to unite behind Enda, who has now gotten an endorsement from the parliamentary party," he said.

Mr Kenny said he was prepared to put the comments made by his opponents behind him. "In the heat of battle, people will say things in electoral contest. When the electoral contests are over and concluded, we move on. That's what the Fine Gael party will do now," he said.

Mr Kenny has postponed the announcement of his new frontbench, beyond next week to allow the dust to settle after the bitter leadership battle.

Speaking after the debate, Fine Gael parliamentary party chairman Padraic McCormack said the decision had been made not to disclose the vote results and that the ballot papers would be "shredded".

Mr Hogan, the key strategist behind the heave, insisted there was "no doubt" this marked the end of any problems members of the parliamentary party had with Mr Kenny's leadership.

The Irish Independent also reports that a successful borrowing of €3.5bn by the Spanish government yesterday eased some of the concerns over eurozone government debt, and gave a boost to the single currency.

The market rate on Spanish government bonds fell 0.11 percentage points after Spain sold €3bn of 10-year bonds at an average rate (yield) of 4.864pc -- less than the 5.04pc market rate before the bond auction. The euro rose to $1.2378 from $1.2311.

There was no immediate market relief for Ireland's bonds.

The yield on 10-year bonds was just ahead of that of Portugal, making it the eurozone's second most expensive debt again, after Greece's untradeable 9.34pc.

Portugal's short-term risks are seen as worse, with a 3.11pc yield on two-year bonds, versus 2.6pc for Ireland.

Spain, which faces debt redemptions of €24.7bn in July, is trying to convince investors it can cut the third-largest deficit in the euro region, while propping up the country's savings banks and lifting the economy out of a two-year slump.

"The strong demand for Spanish bonds should help restore confidence," said Ciaran O'Hagan, fixed income strategist at Societe Generale in Paris.

The good demand was only possible after a considerable rise in Spanish bond yields over the past few days, he said.

The extra interest investors demand to hold Spanish debt rather than equivalent German bonds narrowed to 2.06pc yesterday, after surging to 2.21pc on Wednesday -- the highest since before the euro was introduced, on speculation in the press that Spain would need to tap a European Union financial lifeline.

"A very strong set of results," Sean Maloney, a fixed income strategist at Nomura International in London, said. "A big yield concession in the lead-up, and news that Bank of Spain (central bank) is keen to publish stress test results on banks, probably shored up confidence."

The Irish Times reports that the group behind the five-star Claridge’s, Connaught and Berkeley hotels in London is trying to delay the transfer of its Irish bank loans to the National Asset Management Agency (Nama) as it seeks to complete a refinancing of the loans with foreign lenders.

The Maybourne Hotel Group is in advanced talks to repay fully loans of £630 million (€740 million) owing to the nationalised Anglo Irish Bank and Bank of Ireland with new loans from a group of banks led by Deutsche Bank.

Coroin, the firm which trades as the group, is resisting the sale to Nama of the Irish bank loans, which are earmarked to move in the second wave of transfers which starts later this month.

The hotels are owned by Irish property investors Paddy McKillen and Derek Quinlan, Manchester-based businessman Peter Green and his family, and Dublin stockbroker Kyran McLaughlin.

The group is thought to be concerned about the effect on the business of the transfer of performing loans to the State’s “bad bank”.

Maybourne’s Irish bank loans are among €13 billion in loans owing by the next 20 biggest borrowers after the 10 top borrowers to be transferred to Nama.

Mr Quinlan was among the top 10 borrowers who saw their loans sold to Nama by the five participating lenders in April and May.

A spokeswoman for the Maybourne group said it was in the final stages of the refinancing and that the full repayment of the Irish bank loans was “imminent”.

The group has been in discussions with banks from outside Ireland and the refinancing deal was oversubscribed, she said.

Nama has been kept fully briefed on the refinancing deal and the transfer of the Irish bank loans to the agency would upset the refinancing plan, she added.

Solicitors were instructed several weeks ago on the refinancing of the loans and due diligence on the deal was under way, she said.

“Our current loans are with Irish banks. They are fully performing and no covenant has ever been breached. The Irish banks will be repaid in full once the refinancing is complete and we expect this to be significantly ahead of the December deadline,” she said.

The existing bank loans equate to 65-70 per cent of the value of the group, according to its own estimates, putting a value of up to €1.1 billion on the overall business.

The Irish-led consortium of investors bought the group in 2004 in a €1.1 billion deal which included the famous Savoy hotel. The investors sold the Savoy eight months later to Saudi billionaire Prince Alwaleed bin Talal, an underbidder in the original deal.

Proceeds from the sale of the Savoy – estimated at about £230 million – were used to repay some bank debt in the initial purchase. The performance of the group, which has 530 bedrooms, was ahead of target, the spokeswoman said.

The Irish Times also reports that Ireland IS seeking to extend its bank guarantee scheme until the end of this year in discussions with the European Commission that will be completed this month, according to Minister for Finance Brian Lenihan.

Ireland last month joined 13 other EU countries – including Germany, Sweden, Spain, Latvia and Poland – in getting its state guarantee scheme approved until end-June and analysts expected Dublin to look for a further extension. Ireland, battling hard to manage a heavy sovereign debt burden, first issued a guarantee for some €400 billion of bank liabilities at the height of the credit crisis in September 2008, in what then was one of the most extensive schemes of its kind.

The guarantee, originally for two years, was amended last year to give banks scope to issue debt with maturities of up to five years, but still with a 2010 issue deadline and periodically reviewed by Brussels.

“The terms of the prolongation of the scheme being finalised with the commission would see it being extended under the current terms and conditions until September 29th, 2010,” Mr Lenihan told the Dáil. “Beyond this, the guarantee would be modified to provide for a prolongation . . . to the 31st of December . . . as an issuance window for liabilities of between three months and five years duration. It is likely that the pricing of the guarantee will also change in line with the pricing structure outlined by the European Commission.” The Government would eventually like to phase out the guarantee, a big potential liability for a state with one of the euro zone’s biggest debt burdens.

The decision to seek an extension follows turmoil in sovereign and corporate debt market triggered by concerns about the ability of heavily indebted states to service borrowings. Fears eased a little yesterday after a successful auction of Spanish debt.

The Irish Examiner reports that EU leaders agreed member states should introduce systems of both levies and taxes on banks to claw back the billions of euro taxpayers have sunk into rescuing them, but this is likely to be done on a country by country basis.

Taoiseach Brian Cowen would not say what form this would take in Ireland.

He said Ireland already had such a charge based on the money being paid by the banks for the state guarantee scheme.

He pointed out that the exchequer would receive a €1 billion in charges from the banks by the end of September for the €400bn guarantee Ireland put in place in September 2008.

The scheme, which has imposed the biggest debt burden per person globally, is likely to be extended to at least the end of December and the charges increased under EU rules.

Mr Cowen said: "There has to be a procedure put in place where banks would make a contribution back to the wider economy and to national exchequers in due course. We have it based on the guarantee we put in place … that is a similar mechanism and a system of levies and taxes can be worked on now."

It will be up to each country to decide how to use the money. The Taoiseach indicated he favoured the money going straight into the national coffers to help refund taxpayers. Some countries favour creating an insurance fund against future banking crisis.

The transaction tax would be similar to the US idea of a Tobin tax and would be based on a payment per transaction. It was pushed by Austria, although Sweden, who tried such a tax some years ago, cautioned that it would have be done across the EU and even globally if countries were not to lose out on transactions moving to countries without the tax.

The only country who resisted the idea of extra taxes on the banks was the Czech Republic.

The summit in Brussels also agreed to stress test the EU’s biggest banks to find out exactly the size of their losses as a result of the financial crisis, and say it will be published in July.

The fact that nobody is sure of the amount of trouble each bank is in has contributed to the markets nervousness and exacerbated the problems, according to analyists. The US carried out and published the results of its larger banks early in the crisis.

Ireland, too, tested the banks which led to the massive recapitalisation being undertaken at present.

Spain has said it will publish the details for all its banks later this month, putting pressure on others to do likewise.

And yesterday evening the German Finance Minister Wolfgang Schaeuble asked for new and comprehensive stress tests according to his spokesperson adding that they have "nothing to hide".

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