Minister for Finance Brian Lenihan meets leaders of the main banks later this week for talks aimed at seeking a solution to the worsening financial crisis.

Whether the government will inject fresh capital into the banks or whether private institutions do so in tandem with mergers is still uncertain.

But Lenihan was urged on Tuesday by the bank workers' union, the Irish Bank Officials Association (IBOA), to reject substantial investments in banks by private equity funds.

IBOA general secretary Larry Broderick said, "These people have no interest in the long-term viability of the business. They have no concern for the development of the Irish economy or the future well-being of the Irish people. They are only attracted by the prospect of massive returns on their investment.

"Predators like these aim to buy cheaply and reduce costs in whatever way they can. They are not philanthropists. They are highly secretive entities that are feared and despised in equal measure throughout the business community."

Over the weekend, it emerged at least two sovereign wealth funds from the Middle East might become investors in Bank of Ireland or in a new institution involving a merger of the bank with Irish Life and Permanent.

The government and the Financial Regulator are understood to have encouraged talks between Bank of Ireland and a private equity consortium.

But Broderick said the involvement of private equity funds would undermine the objectives for the State's banking guarantee, such as protecting the public interest, capping excessive remuneration packages, and providing for greater regulation and transparency.

The IBOA estimates any merger between Bank of Ireland and Irish Life and Permanent would lead to a loss of 3,500 jobs "at the very least," with some 100 duplicate branches likely to be deemed surplus to requirements.

Another banking union, Unite, which represents 15,000 workers in the financial sector, said private equity investment Irish banks was "undesirable, unwanted and unacceptable."

Unite's national officer Jerry Shanahan said, "As part of the world's largest trade union, we have seen at first hand the wreckage which such investment leaves behind once a profit has been secured."

He added, "These are difficult times for Irish banks, Irish workers and the Irish economy. We should not, however, walk blindly into the arms of investors whose sole motive is profit."