Both the Minister for Finance, Mr McCreevy, and the Minister for Agriculture, Mr Walsh, appear to have bypassed any further consultation with the Turf Club and the Association of Irish Racecourses and are set to put to the Government their proposals for a new governing body for racing titled "Horse Racing Ireland".

The dramatic move was only revealed to the Turf Club and the AIR late on Thursday evening when the joint working group of those bodies still believed they were in discussion with the Ministers over a new ruling structure that would be acceptable to both them and the Irish Horseracing Authority.

However a Department of Agriculture statement said: "Having considered the views put forward by all sectors of the industry, the Ministers have decided to move on from the consultative phase and accordingly have set out their proposals to bring the matter to a conclusion. The next step will be for the Ministers to seek Government approval to the drafting of appropriate legislation to give effect to the proposals."

The Turf Club yesterday admitted to "surprise" at the move and said the new proposals "would appear to signify that the discussions have been halted at a time when we believed they were close to resolution".

The AIR reacted with "disappointment" and their spokesman Frank Smyth added: "We considered we had reached a situation where we could resolve any outstanding issues and it was agreed that Jim Becher and Michael Dowling (intermediaries) would come back to us. We are more than disappointed that that didn't happen. We were totally unaware of this press release on Thursday night."

This is the latest twist in a saga that began at last December's Moyglare speech by Charlie McCreevy where he offered the income from the five per cent off course betting tax, estimated at close to £50 million a year, to racing if the IHA and Turf Club amalgamated into one ruling body.

Now the Ministers propose "Horse Racing Ireland" which they foresee shall be "established under statute for purpose of the overall financing and administration of racing in Ireland". The board of the new body is set to consist of a chairman and ten members from various sectors of the racing industry with three coming from the Turf Club and one from the AIR.

The proposals outline the HRI's role which will include all finance functions relating to horseracing and its administration. It also includes the negotiation of media rights and the allocation of race fixtures and setting of race programmes.

The proposals also outline the Turf Club's future role, including the licensing of trainers and jockeys, enforcement of the rules of racing and appeals.

In relation to the thorny issue of media rights which the racetracks want to retain, the Ministers propose that "all rights be centrally negotiated by the HRI". Their statement adds: "For the first three years the income from media rights to any races run on a racecourse shall accrue to that racecourse. At the end of the three-year period the average income which accrued to that racecourse during that period shall be guaranteed to the racecourse for a future period."

That isn't acceptable to the AIR whose spokesman said yesterday: "There is no way the racecourses can accept that." The AIR and the Turf Club responded with a joint statement yesterday.

In it they state their main areas of "concern" are the "continued failure to acknowledge the essential role of the registry office" and "the proposed fundamental change in the manner in which race fixtures are determined." They also point to the issue of income from media rights and "the limited recognition accorded to racecourses on the proposed board".