The Government is facing renewed pressure to reverse its controversial nomination of Mr Hugh O'Flaherty to a senior EU post in advance of an embarrassing High Court hearing on the affair next week.
Amid calls from Fine Gael and Labour for the Government to reverse its decision, senior political sources said there was strong opposition to the nomination within the PDs. Disquiet in some sections of Fianna Fail may also be revived following yesterday's High Court decision.
Ireland's European Investment Bank (EIB) position will now remain unfilled from next Tuesday, after the High Court ordered the Government not to proceed with the nomination, pending a judicial review to begin on Thursday.
The case is likely to run for several days and will draw renewed attention to allegations of cronyism against the Government as the Tipperary South by-election campaign peaks.
Fine Gael and Labour yesterday made fresh demands on the Government to withdraw its nomination of Mr O'Flaherty as vice-president of the European Investment Bank.
There was no comment from the Progressive Democrats, who were politically damaged by the affair after it emerged that their leader, the Tanaiste, Ms Harney, had agreed to the nomination. The party has since said the nomination was "a mistake".
Mr Justice Peter Kelly yesterday ordered the Minister for Finance, Mr McCreevy, not to proceed with the nomination until next Thursday. Mr McCreevy asked the EIB not to deal with the nomination at its governors' annual meeting on Monday.
When the nomination was announced Mr McCreevy said the decision had to be ratified at that meeting. However, an EIB spokesman again confirmed yesterday that a meeting of governors was not necessary for making the appointment.
Fine Gael's justice spokesman, Mr Jim Higgins said the nomination was "a personal, misguided initiative" on Mr McCreevy's part, and should be withdrawn due to the "unprecedented groundswell of public opinion".
Labour's finance spokesman, Mr Derek McDowell, called for the withdrawal of the nomination, saying ongoing controversy will do "further serious damage to the principle of the separate constitutional roles of the Executive and the Judiciary".
The controversy erupted again after Mr Denis Riordan, a lecturer in marine communication systems at Limerick Institute of Technology, was given leave to bring judicial review proceedings on the grounds that the procedure followed in selecting Mr O'Flaherty was not in conformity with constitutional propriety and was unfair.
Delivering his ruling in the High Court yesterday, Mr Justice Kelly said it was his view that, on this sole ground, Mr Riordan had crossed what he said was the undoubtedly low threshold of proof required and had shown an arguable case to be made. Whether Mr Riordan would fulfil the higher standard of proof at the full hearing was a matter for the trial judge, he stressed.
A Government spokesman said last night that the Attorney General was studying the judgment. The Government could decide to appeal the decision or wait and defend its nomination at Thursday's review hearing.
There was concern in political circles yesterday that should Mr Riordan be successful in his action, such a ruling could have wide implications for other political appointments, including EU Commissioners, ministerial advisers and programme managers.