The Government is planning to use State funds to compensate political parties for restrictions on political donations to be introduced shortly.
Under the proposals, corporate and personal donations would be capped. The amount being considered for the cap is £4,000. Party funds would be topped up by the taxpayers through money from the Exchequer, The Irish Times has learned.
The proposals, which may be introduced before the Dail summer recess, would also require disclosure of donors.
Asked about the issue yesterday, Tanaiste, Ms Harney, said the matters were being considered by the Government as part of the radical reform of electoral funding. "I would like to see a cap with a reasonable amount. I don't want to pin myself to any particular amount but I would be talking that type of sum (£4,000) or lower. Obviously we are talking about euro which arises next January. It would be a manageable euro sum."
Speaking in Tokyo yesterday, where she is leading the biggest ever Irish trade mission abroad, Ms Harney confirmed that the Government is also seriously considering a ban on foreign funding as part of any reform proposals.
Ms Harney said the cap would apply to corporate and individual donations. She emphasised she would be pushing for the funding of smaller parties, such as the Progressive Democrats, to ensure they were not discriminated against under any new system.
A spokeswoman for the Taoiseach, Mr Ahern, said last night no figures on capping donations had been agreed and stressed he still believed discussions on the matter with other parties were very important.
This is the second move in a matter of days by the Government on funding. Last week in the Dail the Minister for the Environment, Mr Dempsey, offered to drop a plan to raise election spending limits which would have increased Fianna Fail's limit by £1 million in the next general election.
The Labour Party, which believes all corporate donations should be banned, withdrew from an all-party committee on corporate funding in a row over electoral funding and are refusing to re-enter the talks, despite Mr Dempsey's offer.
The party's environment spokesman, Mr Eamon Gilmore, said the Tanaiste's remarks yesterday represented "slow but tortuous progress" towards acceptance by the Government that the public are demanding the banning of corporate donations.
Meanwhile, pressure is continuing on Fine Gael over the controversial $50,000 Telenor/ Esat donation which it received. According to the results of a Sunday Independent/IMS poll published yesterday, but conducted only in urban areas, satisfaction with the new party leader, Mr Michael Noonan, is at 32 per cent, three points lower that the comparative support for his predecessor, Mr John Bruton, in a poll last November.
Party spokesman on social and community affairs Mr Brian Hayes said the issue of political funding should be put to the people in a referendum.
It was clear, he said, that all Opposition parties excluding Sinn Fein, now favoured a ban on corporate donations. "The Government is hiding behind the claim that constitutional advice stands in the way of making progress on this issue."