Ulster Unionist MLA David McNarry has spoken of people in tears to his constituency office and desperate letters from those devastated by the collapse of the PMS, and suggested the Church has not gone as far as it could to assist those in need.

While appreciating the difficult circumstances for all sides that are involved, he said: "I have, like many politicians, been contacted by PMS savers, people crying down the phone to me.

"There have been more than 25 letters to my office, letters of despair. But it seems to me quite clear, and I am saying this as a Presbyterian, that the church has a moral obligation itself that it needs to recognise. That's an obligation that appears to me to be absent."

He continued: "My view is that the Church should go to the Treasury, not with a cap in hand saying 'save us', but with a plan that says we will be the guarantors for the shortfall, if you provide us with an interest free loan to be repaid after the administrator has completed his work and there's a clear view that the value of the assets can be realised."

The £300 million mutual society suffered a £21 million run in October, which forced it into administration.

The UUP man said that whilst he appreciated that moves were underway to meet the Prime Minister, "the Church needs to be more active".

"Everyone that I have spoken to," he relayed, "believed they were investing in an organisation backed by the Church and which was as secure as could be. And until the crash happened, the Church did nothing to dispel those perceptions. Therefore there is a strong moral obligation on the church to redress this point."

A spokesman for the Presbyterian Church said it is "carefully considering all ways to help those who have been affected by the administration of the Presbyterian Mutual Society".

He said there was "a constructive meeting" with representatives of political parties last Tuesday but that Mr McNarry's suggestion was not raised. "If and when the Ulster Unionist Party wishes to put these or other proposals to us we will carefully consider them," he added.