Cork Garda authorities are to interview 54 people who may have received driving licences from Cork County Council illegally.
Meanwhile they have been warned that their motor insurance policies would be rendered invalid if they drove.
It is understood that the Garda now has a full list of those who received such licences.
Most of those who accepted the licences were in the 22-23 age group, The Irish Times was told. Older people were involved in cases where lorry-driving licences were issued to those only qualified to drive smaller vehicles.
A council staff member has resigned, and a file is being prepared for the Director of Public Prosecutions.
Garda Fraud Squad sources in Cork said yesterday the matter was under active investigation and that the people who had received licences without taking a driving test were being contacted.
Cork County Council, which has started an internal inquiry, has urged anyone who paid money to a council employee to acquire a licence through improper channels to make contact immediately to regularise the position.
It further warned that anyone using a licence improperly could face serious implications in terms of civil law and insurance regulations.
It appears that the council employee involved received up to £200 a time for car and motorcycle licences, as well as for heavy goods vehicles. The operation is said to have netted him as much as £10,000.
The matter came to light last August. The council has been using extensive computer records to establish precisely the extent of the fraud.
Part of the Garda's investigation is concentrating on the person involved, but also includes those who may have purchased licences through third-party contacts, including some people in the car industry.
A Garda source said that if anyone holding an invalid licence was in an accident, there could be serious repercussions, not only involving the insurance company which gave cover believing the licence to be valid, but also any injured party, who would be free to take a civil case.
The question of making a false declaration to an insurance company was pertinent as well, he said.