Up to 150 hotels are under threat following the decision by Bank of Scotland Ireland to close down, according to the Irish Hotels Federation.

It is estimated that the bank provides upwards of €30 million in working capital facilities to the hotel sector. It is responsible for 20 per cent of all loans to the sector – equating to more than €2 billion in long-term loans.

 Irish Hotel Federation President Paul Gallagher has called for a Government 'guarantee' scheme for the sector.

Speaking on RTÉ's Morning Ireland, Mr Gallagher said hotels will be unable to find credit elsewhere.

In a statement yesterday Mr Gallagher said the IHF was concerned that many hotels will face cash flow issues during the winter months. 'In addition to long-term loans, the existing package of facilities provided by Bank of Scotland (Ireland) to our members includes vital seasonal funding to carry them through the quieter winter period.

'Unilateral withdrawal of these working capital facilities at the end of December would be catastrophic, particularly at a time when other banks are reluctant to take on new customers and when asset securities would continue to be held by Bank of Scotland (Ireland)', he said