O'Donnell restates willingness to quit

The Departments of Foreign Affairs and Finance have reopened negotiations on increasing the overseas aid budget, as the Minister of State at the centre of the controversy reiterated her willingness to resign over the issue.

Ms Liz O'Donnell said last night she was "gratified" at indications that the Department of Finance would look again at the allocation. The Minister met the Tanaiste, Ms Harney, last night, and afterwards said she was " much happier" that the matter could be resolved "in a budgetary context". She added that when the estimates were published next week , it would be " obvious what my problem was", but Ms Harney had assured her that there was sufficient goodwill at Cabinet to solve the problem by December 2nd.

Speaking earlier yesterday in Belfast, the Taoiseach defended the aid budget, saying it had been increased by 242 per cent over the past six years. But he appeared to leave the door open to Ms O'Donnell by adding that if she wanted to raise an issue concerning the estimates, she should address it to the Department of Finance "in the normal way".

However before her meeting with Ms Harney , Ms O'Donnell said it was clear that the situation surrounding the aid budget was "not normal", and the issue had now become a "litmus test" of the Government's attitude. She added that throughout the negotiations on the estimates, she had been met with "intransigence". And asked if she was still prepared to consider resignation over the matter, she said: "I like my job, but this is an issue of principle and it is that important."