IT was the case of the calm after the storm in the Bord na Mona affair yesterday, with both sides examining the consequences of the Government's decision late on Tuesday to suspend Dr Eddie O'Connor and conduct a further review into his remuneration.

With Dr O'Connor threatening to seek a judicial review of the decision, the only thing which might stop the whole affair moving to the High Court now would be a settlement package allowing Dr O'Connor to leave Bord na Mona on agreed terms.

The further investigation ordered by the Government may, of course, open some other doors. A senior accountant from Arthur Andersen is being tipped as the man to look at the evidence already collated, probably acting in a quasi-judicial role and hearing representations from senior counsel. It remains to be seen whether Dr O'Connor's threatened legal action affects this investigation.

The majority of the Cabinet would have preferred to conclude the issue on Tuesday evening, but the failure to agree a settlement package meant this was not possible.

There is disagreement about how far settlement discussions progressed. Government sources say that an offer was made to Dr O'Connor, amounting to over £750,000 when pension and salary are counted in full. However, Dr O'Connor remains adamant that he was not made aware of any offer.

Further attempts can now be expected to broker a settlement package. Two issues would be at stake in any package, the financial terms on offer and the method of announcement.

Dr O'Connor's advisers are understood to have put an initial settlement proposal on the table in recent days. Some sources suggest there is a considerable gap between this proposal and what the Government would be prepared to offer.

Agreement might be reached quickly enough on pension arrangements and on paying Dr O'Connor what is left of his contract in Bord na Mona. However, the suspended managing director is understood to have included demands for further payments in his initial proposal to which negotiators for the Department of Transport, Energy and Communications would not agree.

The terms under which Dr O'Connor's departure would be announced must also be agreed. The Government would prefer to put the interpretation that business differences led to the parting of the ways, but this may not satisfy Dr O'Connor.

If a settlement is not reached, the Government's options appear narrow. To remove Dr O'Connor under the company's governing legislation, they would have to prove misconduct on his part.

Meanwhile, some legal sources believe Dr O'Connor would have a strong case to make in his move to seek a judicial review of his suspension decision. The mainstay of such a case would probably be an argument that natural justice was not applied in dealing with Dr O'Connor.

The Cabinet wants nothing more than to end the affair quickly, but it is not yet clear whether this can be achieved.