The Government last night offered to drop a plan to sharply raise election spending limits in an effort to encourage the Labour Party to rejoin an allparty committee on corporate donations.
In a surprise move in the Dail, the Minister for the Environment, Mr Dempsey, said he was now prepared to withdraw the proposal that would let candidates in five-seat constituencies each spend up to £30,000.
The change would have increased Fianna Fail's election spending by £1 million in the next election.
Under the existing Electoral Bill, candidates and their political parties are required to keep spending below £20,000 in a five-seater, £17,000 in a fourseater and £14,000 in a threeseat constituency.
Last night the move was being interpreted as a signal that the Government is seriously concerned that it will face a public backlash for allowing corporate donations to continue.
In addition, the move may allow it to capitalise to some extent on Fine Gael's embarrassment over the $50,000 payment from Telenor, the Norwegian telecommunications company.
The Minister said he was asking only that Labour rejoin the committee, which was set up last year to discuss corporate donations, without preconditions. "I am not asking the Labour Party to change their stance on corporate donations."
However, Mr Dempsey did not offer a signal that Fianna Fail is ready to back away from its support for corporate donations. Up to now, the Taoiseach, Mr Ahern, said they could not be constitutionally banned.
Replying shortly afterwards in the Dail, the Labour Party leader, Mr Ruairi Quinn, refused to give a direct answer to the Government. However, he said, it would "not be drawn into a charade".
Fine Gael TD Mr Alan Shatter said the move was "a belated recognition" by the Government that it is not acceptable to attempt "to buy their way back" into power.
