Debate is intensifying about the future of the Groceries Order, which is now under examination by the Tánaiste, Ms Harney.

Mr John Fingleton, the chairman of the Competition Authority, yesterday renewed his calls for the abolition of below-cost selling, which is the key ruling of the order. He told The Irish Times that the Consumers' Association, which has expressed serious reservations about abolishing the order, was putting forward a case "which is not representing consumers and not based on sound analysis".

However, Mr Dermott Jewell, chief executive of the Consumers' Association, reiterated his view that abolishing the order and allowing below-cost selling would not necessarily benefit consumers. The danger was that it would allow the existing players to sell below cost for a period, in response to any threatened entry into the market by a new player.

The abolition of the order is also strongly opposed by industry lobby groups such as RGDATA, which represents retail grocers. They were part of a group that successfully lobbied to keep the order three years ago when the Competition and Mergers Review Group recommended its abolition.

However, the Government is now under more pressure on the inflation issue, which has intensified following this week's report from Forfás showing that this year, Ireland could become the most expensive country for consumer goods in the euro zone.

Ms Harney is likely to seek a quick decision with her Government colleagues on the Groceries Order. She has indicated that she would favour abolishing the order, but the issue is likely to attract significant interest from backbenchers of all parties and sources say that no decision has yet been made. The Government is also examining easing the restriction on building superstores, as a further way to increase retail competition.

Following the Forfás report, a number of Government ministers have said that reducing price pressures is now a priority. One vehicle established to try to do this is a special group set up under the new national programme. Following discussions with this group, the Director of Consumer Affairs, Ms Carmel Foley, is expected to launch a public price awareness campaign. The group has also held discussions with Mr Fingleton on competition issues. One option left open to it under the programme is to examine price controls in some areas and while this has been discussed, the widespread imposition of such controls is thought unlikely.

The Government is also coming under pressure not to increase excise duties or indirect taxes further in the next Budget, as a means to hold down inflation next year. This was recommended in the Forfás report and is a central plank of the arguments being put forward by IBEC, the business lobby group, as part of its participation in the anti-inflation initiative. But not increasing indirect taxes would add to the pressure already facing the Government when it considers the next Budget.