The Government is to seek an explanation from the British authorities about the activities of "Stakeknife", the IRA man alleged to have been a British agent for more than 20 years, write Arthur Beesley, Dan Keenan and Suzanne Breen.
The Opposition is to raise the matter in the Dáil today.
The Provisional IRA is in disarray following the naming of the British army's most important double agent, according to republican sources.
The Taoiseach, Mr Ahern, said the Government would raise the matter with the British next week. The disclosures were serious, he said. They raised fundamental issues about "accountability and in some cases the rule of law itself. I am not too sure what way we can deal with this particular one, but I think collectively we have to try to find a way," he said.
The Fine Gael leader, Mr Enda Kenny, described it as "an extremely murky business".
The Taoiseach placed the disclosures about Stakeknife in the context of concern about collusion between the British security system and loyalist paramilitaries in the murder of the Belfast solicitor, Mr Pat Finucane. He said a decision on the next course of action should be taken after a report by the retired Canadian judge, Mr Peter Cory, who is examining calls for a public inquiry into the murder of Mr Finucane.
The Government spokeswoman said later that the disclosures raised questions about the remit of any inquiry in the Finucane case. "I would think we could put these together and move on because we don't want to create political instability into the future," Mr Ahern said.
He said the disclosures would be discussed at a meeting next Tuesday of the British-Irish Inter-Governmental body. The meeting is likely to be attended by the Minister for Foreign Affairs, Mr Cowen, and the Northern Secretary, Mr Paul Murphy.
"I don't think this has been good for anyone," Mr Ahern said. The disclosures did not help efforts to stabilise the peace process. "A lot of these issues come around the Force Research Unit, which continually comes up. It came up in the Stevens \. It came up in the British Irish Watch Group. It seems to come up again here. We have to move to the position where we will be able to leave all of this behind us."
Meanwhile in the North the IRA appealed last night for calm among members, but some spoke of "the heart being ripped out" of the organisation by the controversy, which had the potential to destroy it.
Sinn Féin claimed yesterday to have been contacted by members of Alfredo "Freddie" Scappaticci's family, who was identified by several newspapers at the weekend as Stakeknife.
At a press conference at the party's Falls Road headquarters, Mr Gerry Kelly accused British intelligence sources of leaking the story and briefing journalists.
In a day of bizarre developments marked by claim and counter-claim, Mr Kelly said Sinn Féin had advised the Scappaticci family to get legal advice with a view to making a statement.
Confusion later grew over Mr Scappaticci's whereabouts, with Sinn Féin and the family insisting he was still in Belfast.
However, a reliable British source told The Irish Times Mr Scappaticci had been taken from a west Belfast address early on Sunday and moved to a safe location outside Northern Ireland. Another source said there had been marked security force activity in the area at the weekend prior to Mr Scappaticci's alleged departure.
No one was at the address when reporters called there yesterday afternoon. Another source said IRA members were being told that Mr Scappaticci was the "victim of black propaganda" and was with the IRA "sorting out this mess", and not at a British safe house.
Republicans were keen yesterday to play down the story.