Irish Finance Minister Brian Lenihan has vowed to stay on in office as he is treated for pancreatic cancer.

Lenihan, 50,  will undergo chemotherapy and radiotherapy to try and treat cancerous tissue found in a blockage at the entrance to his pancreas.

“My doctors have advised that I am fit to continue to fulfill my duties,” Lenihan said. “If that position were to change in the course of my treatment, I would be the first to recognize it.”

Lenihan has been hailed for his efforts as finance minister since taking office in May 2008 as the economy shrank for the first time in 25 years.

He set up NAMA, the so-called bad bank to try and remove toxic real-estate loands from lenders' books and has cut spending to help improve Ireland's recovery from the spectacular economic crash.

His efforts appear to be paying off as the yield, or spread, between benchmark German notes and the 10-year Irish debt has narrowed to 136 basis points from 284 basis points in March, which was the highest for at least 10 years.

“I will continue to fulfill the essential work functions of my office,” he said. “The government is determined to implement the plan for economic recovery.”

“Fortunately in the Department of Finance the first half of the year is quieter than the second and so that will give me a chance to undergo a course of treatment in anticipation of a full recovery," Lenihan said.

Lenihan does not foresee any more emergency budgets before the next one, which is planned for December,

"The exchequer returns are out next Tuesday and I expect some slight improvement in the tax returns for the month of December," continued Lenihan.

"I am glad to see that there was more spending in the retail economy this Christmas than last year, as far as can be judged."

Former Finance Minister Brian Lenihan