Harney will be seeking higher moral ground following the O'Flaherty fallout

Mary Harney has one political decision to make which may have momentous consequences for the Government, her party and herself personally: should she pull the plug on the Coalition Government, and if so, when?

After the Progressive Democrats' worst week since entering this Government, the chances of her making any such decision before the autumn appear to have gone. If they are to provoke an election, the PDs would like to be on much higher moral ground than they found themselves this week.

The party also has serious repair work to attempt on internal relations, damaged by this and previous controversies. The O'Flaherty affair has left a bruise which may fade, but will be carried into the next election.

Sources close to the PD leadership insisted this week that Harney is concentrating on making the Government work and is not preoccupied with the prospect of an election. However, party sources also agree that three years into the Government's life, she will now be looking at every issue concerning "political standards" that emerges in the coming months in the light of whether it is one on which she should bring the Government down.

If she makes the right decision her party could be back in the Dail strengthened, with the possibility of a full Government term in front if it. Make the wrong call and she could lose the Government, her party, and possibly even her seat.

A four-TD party has little margin for error. One of those deputies, Desmond O'Malley, will not run again, Bobby Molloy has not made his intentions clear but is likely to run, while Ms Harney is moving to a new and unpredictable constituency.

Damaged personal relationships are the last thing a small party needs, but several friendships have now been soured as the party enters a crucial phase. The most crucial relationship between the party's two highest-profile figures - Harney and Liz O'Donnell - has now been badly strained twice in recent months.

Last November, Ms Harney woke up one Sunday morning to read that Ms O'Donnell had described the Government's asylum policy as "a shambles". She had no notice that Ms O'Donnell was about to embark on a solo run on the issue, staking out a clear, liberal position on the treatment of asylum-seekers.

Ultimately O'Donnell's stance turned out to be good for the PDs, giving them a rare opportunity to define themselves as having a distinct political outlook while remaining a very junior partner in a Coalition Government. However, party sources say Ms Harney was left with a sense of unease that her high-profile colleague had kept her in the dark.

This time around, it was Liz O'Donnell who discovered she had been left in the dark. Harney had consulted O'Malley and Molloy about the O'Flaherty appointment two weeks earlier, while O'Donnell heard of it on the afternoon it was announced.

Her opposition to the move did not become clear until several days after the announcement, when she joined almost all other members of the PD parliamentary party in questioning Harney's judgment.

As the controversy drew to a close on Wednesday, Harney, O'Donnell and senior party sources went to some lengths to paper over the damage to the relationship between the two women. They sat together in the Dail chatting as the vote was taken. Party sources insisted they had a strong political friendship, undamaged by recent tensions.

However, the strength of their personal relationship is often exaggerated. They usually have a good political working relationship, but are not personally close. An Evening Herald story on Thursday saying O'Donnell was planning to oust Harney as party leader was immediately dismissed as "absolute and utter nonsense" by O'Donnell. However both women are capable and ambitious: tensions are likely to linger.

This is not the only damaged relationship. Attorney General Michael McDowell is refusing to say whether or not he will run for the party in Dublin South East. His good relationship with the Taoiseach has even prompted speculation that he would consider running for Fianna Fail.

Once the intellectual driving force of the party, his relationship with Harney has been fractured since he lost his seat at the last general election - an outcome for which he blames the leadership's 1997 election strategy. The relationship was soured further this week when he let it be known that he was not consulted about, and disapproved of, the O'Flaherty appointment at a time when Harney was already under severe pressure over it.

Harney's terse one-line response that McDowell was "the legal adviser to the Government" understated a deep anger in the party that McDowell had added his tuppence-worth of fuel to the already raging argument in the party. The Tanaiste appeared to be telling the Attorney General on national radio that he should keep his views on these matters to himself.

With Michael McDowell's intentions still unclear, Fiona O'Malley - Des O'Malley's daughter - remains a formidable young candidate without a constituency. She is a member of Dun Laoghaire-Rathdown Council for Stillorgan, in Dublin South. She is angry at the week's events: elsewhere on this page, she describes the controversy generated by O'Flaherty's nomination as "lamentable".

With Liz O'Donnell ensconced in Dublin South, O'Malley would almost certainly run in Dublin South East should McDowell opt out. Should McDowell opt to run, O'Malley's eyes will turn to Dun Laoghaire.

However, Senator Helen Keogh is the party's standard-bearer there. Fine Gael has sought to poach her and could come close to guaranteeing her a Dail seat should she agree to run. Keogh says she is not thinking about it, and that "it doesn't arise". That leaves the possibility that it could indeed "arise" should circumstances change.

O'Donnell holds the safest PD seat. Her high profile on Northern Ireland until Brian Cowen's appointment to Foreign Affairs and her liberal credentials boost her standing in relatively affluent and liberal Dublin South.

Harney is moving to the new three-seat Dublin Mid-West constituency, where she is likely to be re-elected. However, the predominance of young, urban working-class voters in new housing estates makes the constituency unpredictable. Presuming Molloy runs again, he is likely to be reelected in Galway West.

Elsewhere, the party has a small number of locally well-known candidates including Senator John Dardis (Kildare South) and Senator Jim Gibbons (Carlow/Kilkenny). Both, however, have considerable ground to make up before challenging for Dail seats, and the party's prospects are also weakened by the decision of Senator Mairin Quill not to stand again in Cork North-Central. Councillor Tim O'Malley is favourite to attempt to defend the seat of his cousin, Desmond O'Malley, in Limerick East.

However, a national swing towards, or away from the party, could change all calculations and bring unexpected success or disaster. For this reason, Mary Harney's decision on if and when to pull out of Government will be crucial to the party's fortunes.