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Joined: 09/03/2009

The Northern Ireland Executive has agreed a £50m hardship fund for people who lost their savings in the collapsed Presbyterian Mutual Society.

It is part of a rescue package put together by the First and Deputy First Ministers.

The plan which targets small savers depends on Treasury approval.

The PMS was forced into administration in 2008 after a run on withdrawals. Nearly 10,000 people lost access to their savings.

The plan is that the fund would be administered by a panel who will make payments depending on individual circumstances.

The proposals also include a loan of £175m plus interest from the Treasury to the PMS administrator. The administrator will then pay creditors, who are mainly larger investors.

A spokesman for the Executive said: "Repayment of the loan would be effected through the rental revenues received from PMS properties, other incomes, and the sale of property owned by the PMS as the market improves."

The proposals depend on Treasury approval to extend the borrowing and on the resolution of any potential state aid issues.

The Presbyterian Church has agreed to contribute £1m to the hardship fund established by the Government as part of the rescue plan.

The Church's general assembly met this week to discuss its part in the bail-out of the Presbyterian Mutual Society.

The High Court originally ruled that shareholders with less than £20,000 in the society cannot receive interim payments from the £20m pot of money that the administrator received from rental and mortgage income.<