The former leader of Fine Gael, Mr John Bruton, yesterday said a confidentiality agreement prevented the party from disclosing information to the Moriarty tribunal about the $50,000 donation from Telenor.
He said the party discovered for the first time, in a meeting in 1998 between the company and Fine Gael's then general secretary, that money received as a personal donation had in fact come from Telenor.
"Before the meeting began and before Fine Gael people there were told anything Telenor insisted the meeting be conducted under privilege and that the content of these discussions be kept confidential unless otherwise required by law," Mr Bruton said. "Fine Gael agreed to this in order to get the information, but was thereby bound by the agreement not to disclose the information to anybody unless obliged to do so by law."
He said the party had sought legal advice in 1998 "to see could we give this information legally. Not just oral but written advice was furnished to the party which clearly stated that we weren't obliged legally to give the information and once we weren't obliged legally we couldn't do it because we had entered into a confidentiality agreement."
Speaking on RTE's Morning Ireland, Mr Bruton said the now deceased Fine Gael trustee and fundraiser, Mr David Austin, contacted him by phone in 1996 to tell him there was money available from a company associated with Esat Digifone.
"I said to him we could not accept the donation because it wasn't that long previously that Esat had been awarded this contract for the second mobile phone licence."
Mr Austin subsequently kept the money in an offshore bank account and paid it to the party as a personal donation a year later, during the 1997 general election campaign.
Fine Gael's spokesman for justice and law reform, Mr Alan Shatter, said on the same programme he believed the decision not to inform the Moriarty tribunal was wrong.
He also said neither he nor the leader of Fine Gael, Mr Michael Noonan, had detailed knowledge of the payment's true origins.