Bank of Ireland defended its plans for a state bailout today against a hail of criticism from shareholders, but admitted it had earlier failed to respond in time to the bursting of Ireland's property bubble.

Bank of Ireland is seeking investor approval for government plans to inject 3.5 billion euros ($4.8 billion) into the lender in a package designed to restore confidence in the financial industry and the wider economy.

The new chief executive of the country's largest lender by assets said the government's bailout was sufficient to boost its capital reserves, but it could still take a long time for full recovery.

"Bank of Ireland has problems. However, it is a fundamentally sound business worthy of trust," Chief Executive Richie Boucher told investors after apologising for recent steep share losses.

"We believe that the amount of capital we are obtaining is sufficient," Boucher said.

A representative of Irish entrepreneur Dermot Desmond, who owns around 1% of the bank, read out a letter calling for an overhaul of the board and expressed doubts the bailout would suffice.

"The market and everyone here knows that irrespective of what we decide today further restructuring will likely be required," Desmond said in the letter greeted with applause.

Many others among the more than 700 retail investors crammed into Dublin's Savoy Cinema for the meeting echoed Desmond's criticism that the bank's leadership should not have appointed a new chief executive from within their ranks.

Boucher was head of the group's Irish retail operations at the height of a real estate boom and still holds that position pending the appointment of a successor.

"I think it's disgraceful because he is one of the people who caused the problem. They need external blood," John Byrne, 65, the retired manager of a manufacturing company, told Reuters at the meeting as others briefly chanted "Go, go, go".

The Irish government has capped Boucher's salary at 500,000 euros as part of an industry-wide clampdown on executive pay. His predecessor, Brian Goggin, drew public scorn last month when he said his salary this year would be under 2 million euros. Goggin retired more than a year ahead of schedule.

Like main rival Allied Irish Banks, which is also receiving a 3.5 billion euro state injection, Bank of Ireland has been badly exposed to the domestic property crash.

Last month, the group said it expected its loan loss impairment charge for the three years to March 31, 2011 to hit 6 billion euros in a worst-case scenario, more than half as much again as a previous estimate of 3.8 billion euros.

Boucher said he had no specific guidance for absolute loan losses and the bank only had worst and best case scenarios.

The government is working on a plan for dealing with the banking sector's soured assets and local media have speculated that Finance Minister Brian Lenihan will opt for the creation of a property company to remove the loans off the banks' balance sheets and manage them to maturity.

Lenihan is under pressure to come up with plan B after plan A - the capital injection - failed to impress investors spooked by a slew of scandals emanating from nationalised lender Anglo Irish Bank and dire prospects for the Irish economy, which is contracting at a record pace.

Bank of Ireland's share price is down 15% since the bailout plan was unveiled in mid-February and Friday's midday price of around 54 euro cents is 97% down from an all-time high of nearly 19 euros a share hit in February 2007.