The Tanaiste has emerged from the PD crisis over the O'Flaherty nomination with her authority in the party damaged, admitting yesterday that her parliamentary colleagues would have opposed the nomination had she consulted them fully.
Ms Harney nevertheless continued to defend the decision vigorously in the Dail last night, despite the near unanimous view of PD TDs and senators that she had made an error of judgment in the affair.
Mr Desmond O'Malley and Ms Liz O'Donnell publicly indicated yesterday that they believed Ms Harney should have vetoed the nomination, which has plunged the party into its most serious crisis in the lifetime of the Coalition Government.
Following the defeat last night of a Fine Gael motion condemning the nomination, senior Progressive Democrats said they hoped the political spotlight would now move away from the O'Flaherty controversy.
Ms Harney conceded yesterday that, had she foreseen the "perception of cronyism" or that she was dropping her "standards", she would have viewed the nomination differently.
The Independent TD, Ms Mildred Fox, abstained on the Dail vote last night, only the second time she has chosen not to support the Coalition in a Dail division. The first occasion was when she voted against joining Partnership for Peace. However, the Government defeated the Fine Gael motion condemning the nomination of Mr O'Flaherty as a vice-president of the European Investment Bank by three votes. All four PD members voted with the Government.
Meanwhile, it emerged yesterday that the appointment of an EIB vice-president with no experience of banking or business is very unusual. "We generally have people who have a CV containing a strong finance, banking or trade background", a senior executive at the bank told The Irish Times yesterday. "At first sight, this is something new."
It is understood that Mr O'Flaherty was in Brussels yesterday for discussions with senior EIB officials about his pending appointment.
Ms Harney admitted yesterday that she had been "surprised" when the Minister for Finance, Mr McCreevy, suggested that Mr O'Flaherty should get the job, as she would have expected someone with a financial background to be appointed.
After hearing strong criticism of the decision at a parliamentary party meeting yesterday, Ms Harney acknowledged the anger within the party, saying: "Perhaps if I had consulted more widely, maybe a different decision would have been made." However, she caused further annoyance to a number of party members immediately after the meeting by giving a robust defence of the decision in an RTE radio interview.
Ms Harney responded further last night to concern within her party that her earlier interviews had sounded disproportionately sympathetic to the O'Flaherty family. In the Dail she acknowledged the "pain and hurt that has been caused . . . in particular to the Ryan family". She also said she believed that the four-year sentence imposed on Philip Sheedy for drunken driving, causing the death of Anne Ryan, was "appropriate" and should have been served in full.
Immediately after the PD parliamentary party meeting yesterday, Ms O'Donnell gave the agreed position to reporters. She acknowledged that sufficient consideration did not go into the appointment. "Having said that, the decision is irreversible as of now. We, as a parliamentary party, have decided - in the context that coalition government is a fallible business - that this would not have been an appointment that we would have made ourselves."
Mr O'Malley, who raised no objection to the nomination when Ms Harney consulted him about it a fortnight ago, also admitted yesterday that he now believed it was a mistake. However, he praised Ms Harney's overall political judgment.