The Taoiseach has been forced to abandon his dream of developing a State-funded national stadium in what is being seen as a humiliating political climbdown.
Deteriorating public finances and sustained pressure from the Progressive Democrats and sections of his own party forced the Taoiseach's hand on the issue.
After a tense Cabinet meeting yesterday, it was announced that no public money would be spent on the stadium and that private funds would be sought instead.
The Cabinet meeting followed a 90-minute discussion between Mr Ahern and the Tanaiste, Ms Harney. Mr Ahern said the difficulties the Government faced in completing road, rail and other infrastructural developments in the next four years led to the decision.
However, Government sources indicated that faced with the task of pushing Ministers to abandon pet projects, the Taoiseach had to take some personal pain in the effort to control the public finances.
Ms Harney said: "For me, it was always a question of how you spend taxpayers' money and given the tight budgetary situation, the emphasis has to be on health, education and infrastructure."
In a statement after Cabinet, the Government said it would ask the Department of Finance and its agencies, including the Office of Public Works and the NTMA and the Department of Arts, Sport and Tourism, to explore raising private-sector funds for the project.
A spokeswoman for the Taoiseach said Mr Ahern was optimistic he would be able to turn the first sod on the site. An advert would be placed in newspapers on Friday seeking private-sector interest.
The Government will ask the GAA to allow the use of Croke Park, on a once-off basis, for the European Champions in 2008 if Ireland's joint bid with Scotland is successful. This would require a rule change by the organisation.
A spokeswoman for the Scottish Executive said the Government remained a bid partner for the tournament. "[The Irish Government] has confirmed that its two preferred sites for the stadiums required in Ireland are Stadium Ireland and Croke Park and that they are taking action to deliver both for Euro 2008," she said last night.
The Fine Gael spokesman on sport, Mr Jimmy Deenihan, said the Government's decision had left Irish soccer high and dry. He said Mr Ahern's "shameful" interference in the FAI's plans to build Eircom Park had denied Irish soccer any chance of a home.
Labour's Mr Pat Rabbitte said "the Bertie Bowl" was "dead". Asking the private sector to provide funding was little more than "whistling past the graveyard".
The president of the GAA, Mr Sean McCague, said a change of rule or policy on the use of Croke Park required a decision of the association's congress. A spokesman for the Irish Rugby Football Association said it was frustrated that another opportunity to build a national stadium had been lost.