The Taoiseach last night supported an implicit attack on the PDs by the Minister for Communications, Mr Dermot Ahern, in which he condemned any dependence on "unbridled market forces" in the formation of economic and social policy.
While the speech by Mr Dermot Ahern brings criticism of the Progressive Democrats into the Cabinet from the Fianna Fáil backbenches, a spokeswoman said last night the Taoiseach had no difficulty with the comments.
However, both the Taoiseach and PD sources rejected any suggestion that they had the potential to destabilise the Government.
Mr Dermot Ahern did not identify the PDs in his speech to Fianna Fáil activists in Dundalk on Saturday, but he implicitly criticised suggestions by the Minister for Justice, Mr McDowell, that inequality could be an incentive in the economy.
He also rejected the often-quoted view of the Tánaiste, Ms Harney, that the Irish were "spiritually" closer to Boston than Berlin: "We chose neither Berlin nor Boston."
The remarks came despite a decision at senior levels in Fianna Fáil to deliberately "dampen down the split" with the PDs in the wake of the poor Government performance in the local and European elections.
This led some TDs to characterise the speech as an effort by Mr Dermot Ahern to position himself on the left of the party in advance of a possible leadership contest in Fianna Fáil, should the Taoiseach leave domestic politics to become president of the European Commission.
The Taoiseach's spokeswoman played down the significance of the remarks by saying they were merely a reiteration of Fianna Fáil's core philosophy. "Fianna Fáil is a separate party in government with the PDs implementing a joint programme of government. Fianna Fáil is a party with a different philosophy," she said.
It is understood the Minister did not clear his script in advance with the Taoiseach, but phoned afterwards to tell him what he had said. ...
In his speech, the Minister emphasised the social roots of Fianna Fáil policy, while claiming credit for the prosperity delivered during the economic boom.
He said Fianna Fáil rejected the classic neo-liberal stance on inequality. "We reject the winner-takes-all approach. We reject the policies which place all emphasis on equality of opportunity, whilst providing only a modicum of social protections."
He added: "At their worst these policies are active drivers of alienation, higher crime-rates and educational drop-out. At their worst these policies corrode social cohesion."
He went on: "In economic and social policy Fianna Fáil rejects the notion that the state should take a back seat and allow unbridled market forces shape our country."
He emphasised the policy of low taxation but said that this had to come hand in hand with a recognition that this should deliver greater social opportunities.