Fine Gael has declined to confirm or deny that it received a donation of £50,000 from Mr Denis O'Brien at about the time the former chief executive of Esat Digifone successfully bid for a mobile telephone licence.
A report in the Sunday Tribune said Mr O'Brien had arranged for the payment of £50,000 through Telenor, a Norwegian company that held a 40 per cent share in Esat, and that it was routed through a Jersey bank account in 1995.
The money was said to have been returned almost two years later, after Telenor had inquired if it had been received by Fine Gael. The timing also coincided with the establishment of the Moriarty tribunal, which was instructed to inquire into the affairs of Mr Michael Lowry.
At the time the donation was alleged to have been made, Mr Lowry was minister for transport, energy and communications in the rainbow coalition government and chairman of Fine Gael's trustees, who had responsibility for party funding.
The payment was said to have been made by Telenor at the instigation of Mr O'Brien, shortly after the mobile telephone licence had been awarded, in 1995. The Esat Digifone consortium was made up of Mr O'Brien's Esat Telecom, which owned 40 per cent; Telenor, which owned 40 per cent; and Mr Dermot Desmond, whose company, International Investments and Underwriting, held a 20 per cent stake.
A spokesman for Fine Gael said last night he could not comment on the matter because of the confidential terms on which political donations were sought and made at the time. However, if a donor had no difficulty in revealing details of a donation, then neither did Fine Gael.
A spokesman for Mr O'Brien, who is at present engaged in bidding for the fixed-line business of Telecom against Mr Desmond, said he had nothing to say about the issue. "It is really Telenor you should be asking," he said, "because the allegation is that they made the payment."
Telenor no longer has a presence in the State, and a spokesman could not be contacted in Norway last night.
The decision to award the mobile telephone licence to Esat Digifone caused controversy because the licence fee was capped at £15 million under a provision proposed to the European Commission by the Department of Transport, Energy and Communications.
The cap enabled Esat to compete effectively against companies such as Motorola, which had enormous resources. Several companies later complained, unsuccessfully, to the EU.
At the time Mr Lowry refused to publish the report of the consultants who advised on the licence on the grounds that it contained sensitive information.
Following Mr Lowry's resignation as minister in 1996, his successor, Mr Alan Dukes, ordered an internal departmental investigation into the granting of the licence and concluded that nothing untoward had happened.
Last year Mr O'Brien made donations of £50,000 each to Fianna Fail, Fine Gael, the Labour Party and the Progressive Democrats in order to support the democratic system. Labour was the only party to return the unsolicited contribution.