The Government is to press ahead with the appointment of former Supreme Court judge Mr Hugh O'Flaherty to the European Investment Bank after serious tensions between Fianna Fail and the Progressive Democrats over the controversial nomination were defused.
Mr O'Flaherty said he would do "whatever is the wish of the Government at this stage" in relation to the £147,000-a-year appointment. He insisted in lengthy interviews he was not guilty of any wrongdoing in the Sheedy case and said he had done "much the same sort of thing" in other cases.
Asked if he would still be taking the job he said: "Yes I am. Well, subject to what the Government has to say about it. And the Supreme Court, if may be."
Mr O'Flaherty said his intervention in the Philip Sheedy case was not humanitarian, as the Chief Justice's report into the matter said, but was a case of "simple justice".
A Government source said last night that Mr O'Flaherty had "certainly made an attempt to deal with the concerns of the people". A spokesman said it was still "definitely the wish of the Government" that the appointment proceed.
However, it was not made clear if the Taoiseach, Mr Ahern, was fully satisfied that the "bits" of the Sheedy story he said were missing had been filled in by Mr O'Flaherty through interviews with Today FM and TV3.
The Taoiseach did not hear the interviews but was briefed on them afterwards. He reopened the controversy over the O'Flaherty appointment and angered the PDs by saying on Tuesday that, in his own good time, it would be a good idea if the former judge gave an account of his role in the affair.
The tensions which had developed overnight between the Taoiseach and the Tanaiste on the affair were eased when Mr Ahern told the Dail yesterday he was still "100 per cent behind the nomination" after Ms Harney publicly demanded clarification. He said it was a collective Cabinet decision to appoint the former judge and as head of the Government he stood over that.
In a statement afterwards, the Progressive Democrats said: "The Taoiseach has today clarified his position on the O'Flaherty nomination and the party has noted it." A PD source said this "put an end to the issue" and it was now business as usual.
The Minister for Finance, Mr McCreevy, said in answer to Opposition private-notice questions that he would ask the EIB to expedite the appointment of Mr O'Flaherty as a vice-president.
The Labour Party disrupted Dail business yesterday evening following what it believed was a nasty reference by Mr McCreevy to Kildare TD Mr Emmet Stagg.
The Dail was suspended twice in uproar yesterday as angry Opposition parties demanded further statements from the Taoiseach on the O'Flaherty affair and divisions between the Government parties on the issue became clear.
Earlier yesterday, Ms Harney said she had been taken aback by the Taoiseach expressing the hope that Mr O'Flaherty might explain his role in the Sheedy case. She told journalists it was up to the Taoiseach to clarify his remarks. She said that either the Government was behind the nomination or there were "other alternatives".
The coolness between Fianna Fail and the Progressive Democrats was evident in the Dail when the PDs absented themselves from the House as the Taoiseach rose to begin the Order of Business.
A Fine Gael frontbench spokesman, Mr Michael Finucane, said last night Mr O'Flaherty's "select" media interviews did not go far enough in establishing the full facts of the Sheedy affair. He called for an inquiry to be established by a committee of the Houses of the Oireachtas.