Allen & Overy (A&O) has won a mandate to advise the Treasury on the UK's £3.2bn bilateral loan agreement with Ireland.

The appointment sees A&O's global banking chairman Michael Duncan and special global counsel Philip Wood (pictured) take the lead role for the firm in relation to the UK's part of the Irish bailout.

The mandate will be seen as a coup for A&O, as Slaughter and May has traditionally monopolised high-end Treasury work, advising the Government throughout the financial crisis on deals such as the nationalisation and restructuring of Northern Rock.

However, A&O was instructed alongside Slaughters, Herbert Smith and Simmons & Simmons in November last year to advise the Government on the winding-down of its stake in banks that were recapitalised during the crisis.

Irish outfit Arthur Cox has been advising the Irish Government on the country's €85bn (£72.1bn) bailout, which has seen the fund receive contributions from the Irish Republic, the International Monetary Fund and the EU, as well as bilateral loans from Sweden and Denmark and the UK.

Managing partner Padraig O Riordain has been leading Arthur Cox's team alongside head of finance Grainne Hennessy.

Ireland's bailout fund will be split between propping up the country's banking system and helping with day-to-day spending.

According to a National Audit Office report in December last year, Slaughters was set to rake in around £32.9m in fees by March 2010 from the numerous mandates the firm won from the Treasury during the downturn.