Munich - As the bail-out of mortgage lender Hypo Real Estate (HRE) kicked into gear Wednesday, details emerged of its tussle with the German government.

Berlin was angry that HRE's complex corporate structure made it practically impossible for regulators to check up on HRE's true cash position during the crisis, officials said.

Meanwhile, a newspaper reported that HRE was preparing to sue German Finance Minister Peer Steinbrueck over remarks last week suggesting that HRE would be broken up.

HRE disclosed that a rescuing 35-billion-euro (48-billion-dollar) credit line from the Bundesbank German central bank was opened Wednesday, a day after HRE chief executive Georg Funke resigned under government pressure.

Government and banking-industry figures continued to call for the removal of the HRE supervisory board chairman, Kurt Viermetz. HRE insiders said he would stay.

The Thursday edition of newspaper Financial Times Deutschland is expected to report details about Steinbrueck's assertion that HRE had set lawyers on him at the same time as it was begging the government for state aid.

The newspaper said HRE had engaged auditors to study whether the government was to blame for the increased cost of the bail-out which expanded from 35 billion to 50 billion euros over the course of last week.

HRE had accused Steinbrueck of making its problems worse by suggesting that the HRE group would be broken up.

Government officials said regulators' checkup on HRE had been made difficult because the Munich-based HRE holding company had no banking licence and could not be compelled to reveal consolidated figures.

In addition, the stricken HRE subsidiary, Depfa, was an Irish company, outside German oversight.

A spokeswoman for the regulator BaFin said German and Irish regulators had checked on Dublin-based Depfa jointly.

In a related development, Steinbrueck appealed to fellow G7 (Group of Seven) finance ministers to increase the personal liability of senior bank executives for blunders.

A copy of the letter was obtained in Berlin. It read, "It is impossible to give the public any reason why decision makers in these companies are not being held responsible for errors of judgement."

Steinbrueck said many of them were leaving their posts with big bonuses, as opposed to facing punishment. (dpa)