Mr Denis Foley TD is expected to resign from the Fianna Fail parliamentary party this week, while continuing to support the Coalition Government in the Dail.
The disclosure that Mr Foley held more than £130,000 in two Ansbacher offshore accounts has already led to his resignation from the Dail Public Accounts Committee. He came under pressure to surrender the party whip last week to prevent further embarrassment to Fianna Fail.
Senior party sources are confident Mr Foley will take the required step when he completes giving his evidence before the Moriarty tribunal later this week. They are anxious that "due process" should be observed, but confirm that the situation will be reviewed once the Kerry North TD has completed his evidence.
Already dependent on the votes of three Independent TDs, the Government would be further weakened by the loss of Mr Foley's Dail support. This could happen, however, if the Opposition parties are successful in pursuing and penalising him under the terms of the Ethics in Public Office Act.
Mr Foley's failure to declare an interest in the Ansbacher issue when he voted against an extension of the terms of reference of the Moriarty tribunal in the Dail could result in his being suspended from the Dail for a maximum of three months.
The Committee on Members' Interests, chaired by Fianna Fail TD Mr Tim Killeen - and with a Government majority - is expected to investigate this and other matters involving non-disclosure by Mr Foley of his offshore accounts in the coming weeks.
Unless Mr Foley has completed his evidence before the Moriarty tribunal by Wednesday, the Fianna Fail parliamentary party will not consider the issue this week.
However, a special Dail debate on Mr Foley's behaviour; the implications it has for members of the Oireachtas; and the response of the Taoiseach, Mr Ahern, to information he received on the matter, will take place in private members' time tomorrow and Wednesday.
By resigning from the parliamentary party, but remaining on as an elected member of Fianna Fail, Mr Foley would be expected to continue to vote for the Government. ail. His eventual return to the parliamentary party would depend on the regularisation of his tax affairs with the Revenue. He is not expected to contest the next general election.
His daughter, Ms Norma Foley, who is expected to seek the Fianna Fail nomination, said on Radio Kerry yesterday that the family had been considerably bolstered by the public support it had received and she stood "110 per cent" behind her father.
Ms Foley, a teacher, is currently chairman of Tralee Urban District Council. She said: "I have every confidence in himself, for the man that he is and for the good that he has achieved. It is not difficult for me to be standing with him at this time, nor in the future, nor was it difficult in the past.
"I am happy to do it, as are all our family. He remains our priority and I have no difficulty with that."