Published Wednesday, 03 June 2009
Mr Woodward added it was important not so seek to undermine devolution "through the back door".
The government has faced numerous appeals to underwrite the deposits of 9,500 people caught up in the collapse late last year.
Investors lost millions when the Belfast-based society went into administration.
While the government guaranteed deposits up to £50,000 in banks caught up in global meltdown, it made no such undertaking to the PMS because it was not regulated by the Financial Services Authority.
During Commons question time, Mr Woodward was repeatedly pressed to provide help for those who had lost money.
He told MPs: "I'm not trying to evade our responsibility. If we can find a way to help these people, we should.
"And I'm prepared to break the bureaucracy to do it if it's at all possible."
Mr Woodward said: "I am prepared to work to bring people together, however ... equally I am very conscious of the fact that if you devolve government, you do need to recognise that you have devolved the government and that actually through the back door you can't suddenly be seen to be taking control of an issue because you are not quite sure whether it has been handled in the way you might have done it."
Mr Woodward said it was important to realise that people with money in PMS were investors rather than savers, and their deposits carried an element of risk.
But he added: "There is an issue here about whether or not this should have been regulated. It was registered, it should have been regulated. There is an issue that I do want and continue to want the FSA to look at."
On Wednesday evening, Enterprise Minister Arlene Foster welcomed Mr Woodward's remarks, but insisted the regulation of industrial and provident societies was not a devolved matter.
She said her Department's responsibilities related to registration not regulation.
The Prime Minister and the First Minister are due to meet in two weeks to discuss the issue.