The Department of Education will this week publish an independent report on the bid by Waterford Institute of Technology for university status.
It is understood the confidential report, by consultant Dr Jim Port, acknowledges the benefits which would flow to the southeast region from the institute gaining university status.
Crucially, however, the report also warns that any move to change the designation of the institute could damage and "dilute" the institute of technology sector.
Sources say the report presents a range of options but they stress that the thrust of the report is broadly sceptical towards the bid.
Minister for Education Mary Hanafin yesterday briefed the Cabinet on the report, which has been with the department for some time. A spokesman said last night: "There is a lot of debate about granting university status in one area that might be laudable [ but] could have far reaching effects on others."
Two weeks ago, Waterford-based Minister for Social Affairs Martin Cullen clashed with Ms Hanafin on Waterford IT's future during a meeting of the Fianna Fáil parliamentary party.
The Port report says that university status for the institute would be a boon to the entire southeast, the only major region without a university.
However it also points to the possible dangers of any such move. These include:
The other 13 institutes of technology could, he says, move to make their own applications for university status;
there would be less diversity at third level with less emphasis on technology - contrary to Government policy;
Port warns that the education profile of the institutes could change dramatically, with more arts and humanities and less emphasis on technology;
he also warns of a greater focus on higher qualification and a drift away from the vocational and technological traditions of the institutes.
After this week's publication of the Port report, the Government could delay a decision on the issue by asking the Higher Education Authority or a broader review group to examine the report in the light of overall policy for higher education.
This would effectively "park" the Waterford institute issue for some time.
In recent weeks both Taoiseach Bertie Ahern and Ms Hanafin have appeared to lay the ground for a negative decision on the institute's case, but the pressure coming from Mr Cullen and the southeast region means that senior Ministers will want to appear open-minded on the issue.
Last month, Mr Ahern warned that upgrading the institute could not be done "in isolation". Ms Hanafin said while there were strong regional arguments here, she would have to take a national view.
Dublin Institute of Technology has joined the Waterford institute in seeking university status.