DUBLIN, Feb 2 (Reuters) - The Irish government is in talks to inject 4 billion euros ($5.14 billion) each into Bank of Ireland BKIR.I and Allied Irish Banks ALBK.I and to create a state-backed insurance scheme to underwrite some of their bad debts, a source familiar with discussions said on Monday.
The source said the plan would be unveiled later this week as talks are still ongoing.
“There is a small bit of tinkering yet to be done,” said the source, who declined to be named because of the sensitivity of the talks.
“AIB are reluctant to take on that amount but the government feel that they (should) do.” ($1=.7783 Euro) (Editing by Jon Loades-Carter)
The government of Ireland plans to inject €4 billion each into the Bank of Ireland and the Allied Irish Bank.

An insurance scheme to underwrite bad debts would also be created and the banks will attempt to raise €1 billion from shareholders. The two banks have been in need of recapitalization for several weeks. The government had previously offered €2 billion. The deal will see the government take on up to €24 billion of risk from speculative property loans by the banks.

The government has already moved to nationalize the country's third largest bank, Anglo Irish.