Ireland's parliament will vote on a controversial multi-billion euro EU/IMF bailout loan on Wednesday, putting pressure on opposition parties critical of the aid package ahead of a general election early next year.

Prime Minister Brian Cowen is expected to get the 85 billion euro rescue package through the lower chamber, but his politically charged decision to seek parliamentary approval has delayed IMF board approval for its portion of the funds.

The support of at least two independent MPs will ensure the package passes, despite the fragility of Cowen's majority and the bailout's rejection by the main opposition parties, the center-right Fine Gael and center-left Labour.

Both parties have criticized Cowen for seeking external funds, saying the deal was a humiliating loss of sovereignty.

They have said they will renegotiate the package when they come to power, as is expected after an election, possibly in March.

They will have to work within its targets or risk losing funding, but uncertainty around what they parties may do and differences over how they would tackle the crisis are unsettling investors. In particular, they have threatened to make senior bondholders in some banks share the burden of their losses.

They were talking about holding the election in January a while ago, now March is being mentioned. The longer it drags on, the more of a negative it becomes, said Ken Darmody of Goodbody Stockbrokers.

Investors would prefer to have a new government in place because at the moment you don't know what the policies really are of the two that are possibly going into power.

Concerns about the euro zone's debt crisis escalated on Wednesday after the ratings agency Moody's said it had put Spain on review for a possible downgrade, hitting the euro.

The premium that investors demand to hold Irish 10-year debt over benchmark German bunds was at 547 basis points, an increase of 6 basis points on the day but still an improvement from over 700 basis points when the bailout was first unveiled.

DONE DEAL

The bailout is designed to end a two-year banking crisis that has brought the Irish economy to its knees and sent shock waves through the euro zone.

In return for 50 billion euros in sovereign funding and 35 billion euros in capital top-ups for its banks, Ireland has promised to shrink and radically restructure its lenders and tackle the worst deficit in Europe by 2015 at the latest.

Dublin will squeeze 15 billion euros -- equivalent to around 10 percent of annual economic output -- from its deficit over four years, starting with the 2011 budget's record package of 6 billion euros in spending cuts and tax rises.

Some economists have warned that such aggressive austerity measures will tip the domestic economy into a prolonged downturn, jeopardizing its ability to meet its deficit targets and deal with the debt crisis.

In an attempt to bring order to the banks, parliament will also vote on Wednesday on a new law giving the government extensive power to restructure the sector, including the power to impose losses on subordinated bondholders.

Dublin said on Wednesday it had injected over half a billion euros into the building society EBS to shore up its balance sheet.

There will be a two-hour debate on the bailout package before a vote, likely to place around 1330 GMT. A vote in favor will enable the IMF to approve its 22.5 billion euro portion of the bailout on Thursday.

Dublin expects to start tapping the funding early next year.

The bailout gives us an opportunity to get our house in order. We'd have preferred if we'd done proper restructuring on the banks, but that didn't happen, said Brian Devine, chief economist at NCB Stockbrokers.

He said there was no choice about taking severe budget measures. We couldn't fund ourselves in the market. It's a done deal.

(Editing by Carmel Crimmins and Kevin Liffey)

International Monetary Fund