NAMA says Irish public good at risk from court case

* NAMA says Treasury Holdings "hopelessly insolvent"

* Court case frustrating NAMA's ability to do its job

* Treasury hoping to progress to main challenge

DUBLIN, Feb 22 (Reuters) - Ireland's state-run "bad bank" warned on Wednesday that it would not be able to operate for the public good if developer Treasury Holdings wins a challenge over the way parts of the property group's business were put into receivership.

Created in 2009 to purge banks of risky land and development loans, the National Asset Management Agency (NAMA) has become one of the world's biggest property groups after shelling out just short of 31 billion euros on loans valued at over 74 billion euros at the height of Ireland's property bubble.

Its aim is to achieve the best return for the state on the assets it has acquired, and it has so far appointing receivers to more than 1,000 properties.

Treasury, one of Ireland's biggest property groups, said on Tuesday that NAMA privately made a decision to call in the receivers in relation to 35 properties and debts of 900 million euros ($1.19 billion) without notifying the company for over a month.

Describing Treasury as "hopelessly insolvent", NAMA said it had decided to appoint receivers after a lengthy engagement with the group and that Treasury's actions were frustrating it from doing its job.

"The public interest in NAMA's successful achievement of its statutory purpose would be significantly diminished if these proceedings were to succeed on any level," NAMA senior portfolio manager Mary Birmingham said in an affidavit.

"By taking this action against NAMA, the directors of the group are effectively frustrating NAMA from exercising NAMA's legitimate and undisputed rights in line with its objectives."

Treasury, whose multi-billion euro property empire includes golf course resorts in Sweden and a 5-star hotel in Moscow, also claimed on Tuesday that NAMA rejected, without sufficient consideration, offers to acquire its loans.

NAMA said the offers from Australian investment bank Macquarie and U.S. real estate investor Hines were commercially unattractive and that after a two-year search, Treasury had been unable to attract interest at an acceptable level.

NAMA said the group was not being supported by its shareholders and was unable to repay debts that were not being serviced after its cash balances shrank from 36 million euros to 4.1 million between November 2010 and December 2011.

Treasury, controlled by high-profile developers Johnny Ronan and Richard Barrett, is looking to prevent NAMA from taking any action in relation to the assets pending the outcome of the case and will refer to previous rulings against the state-run body.

NAMA suffered a setback in the Dublin courts last year when it was told it could not acquire 1.4 billion euros in loans secured on the assets of property developer Paddy McKillen because its decision to do so had been made before NAMA was legally established.

The preliminary court hearing is expected to last until Friday, with Treasury hoping to progress to a main challenge that would likely be heard in eight weeks time.