A Fine Gael member of the Cabinet appears to be pouring cold water on Labour party demands to lower the bankruptcy term to one year.

The junior coalition partner has put forward the move as leverage with the banks in the hope it will force them to do deals on arrears with those unable to pay their mortgages.

New mortgage rules had been expected to be approved by Cabinet next week - but now may not be ready.

The Labour Party have proposed reducing the period of bankruptcy here from three years to one year.

Longford-Westmeath Labour TD Willie Penrose has put forward legislation, saying the “modest” proposals seek “to reduce the horrible and unrelenting stress levels still holding this country prisoner.”

Last month the Tánaiste said she is not happy with the length of the period of bankruptcy in the Personal Insolvency legislation

Minister Paschal Donohoe says he does not believe changing the current three year bankruptcy needs to be changed: