The International Monetary Fund says Ireland could have saved billions of euro if it had been allowed to burn the bondholders at some of its banks.

It says there would have been "significant" benefits for the Irish public if senior bondholders in Anglo Irish Bank and Irish Nationwide had been burned.

The government has previously said it wanted to burn senior bank bondholders but the plan was blocked by the European Central Bank (ECB).

Craig Beaumont from the IMF says burning bondholders at the other surviving banks could have been more risky.

Meanwhile the financial body is warning that the last austerity budget may need to be bigger than the Irish government is planning.

Its final report on the Irish bailout deal says the next budget will probably need to include measures of €2.4 billion.

That is €400 million more in tax increases and spending cuts than the government is currently planning.

The IMF has said Ireland should have pursued a bigger budget earlier this year in order to ease the burden in the coming years.