DUBLIN - The international bailout of Ireland will provide 85 billion euros (S$149 billion) of capital to help shore up its public finances and ailing banks, local broadcaster RTE reported Tuesday.

Irish banks were to raise their capital reserves from eight to 12 percent as the European Union and International Monetary Fund sought to reassure depositors in the Irish financial system and prevent a flight of money out of the country.

Funding for this was to come from the 85-billion-euro bailout, with the remainder to be used to help fund the government's everyday running.

In return for the capital injection, the Irish government was to take an increased share in two of the worst-hit banks.

According to RTE, the government was to take a 99.9 percent stake in Allied Irish Banks (AIB) and to become majority stakeholders in the Bank of Ireland, which is currently 36 percent state owned.

The size of Irish banks was to be reduced by selling off blocks of loans with investors to be offered a loss-sharing arrangement with the government.

Ireland has suffered a major banking crisis following the collapse of a property bubble that has seen prices plummet by more than 50 percent.

AIB, which is already partly state-owned, was rocked last Friday when it revealed customer deposits had plunged 13 billion euros since January.

Bank of Ireland warned two weeks ago that annual profits will slump by 35-40 percent this year on falling revenues and the cost of state guarantees at the retail lender.

The IMF was expected to issue a formal letter of intent detailing the final arrangements to the Irish government next week.