Iconic Irish department store Arnotts is set to come under the control of Anglo Irish Bank.

The bank is understood to have sought permission from the European Union to take action and from this morning has taken effective control.

The department store on Dublin’s Henry Street has a debt pile in excess of €250m owed to state-owned Anglo Irish Bank and to Ulster Bank.

It amassed the debt following an ill-fated decision to back a 1.5m sq ft €750m redevelopment of the Northern Quarter district to include a retail development in and around the store for which permission was granted in 2008. The project never got off the ground.

In 2006, Anglo Irish Bank teamed up with investment company Boundary Capital to make a joint €65m investment in the firm for a 45% stake.

According to reports, none of the 950 jobs at Arnotts is under threat and the store is trading well.

A deadline of August 9 has been set for objections to the move by the banks.