The Tánaiste yesterday warned that the PDs would leave Government if there was a significant change in its economic outlook, saying they would not accept a "tax and spend" approach or a pre-election spending spree.
As PD TDs and senators met to discuss their approach to the forthcoming Dáil term, Ms Harney said she believed the coalition could remain coherent.
She said she hoped the Cabinet reshuffle at the end of this month would make the Government seem like "a new Government" involving "a new group of people".
Speaking on the Eamon Dunphy Show on NewsTalk 106 yesterday morning, she said the Government should resist the demands of some Government backbenchers and commentators "who think it's time to forget about the economy, move on".
In a warning that PD participation in the Government was not unconditional, she said: "If you're asking me the question, will we stay in Government regardless of the policies being implemented, of course we won't."
Her remarks reflect ongoing PD concern that recent efforts by Fianna Fáil to portray itself as a more caring and responsive party do not lead to a significant change in the Government's liberal low-tax economic policy, which, the PDs argue, is the cornerstone of the Republic's economic success.
She said that the Government's term might not be as long as that of the last one, apparently echoing recent remarks by her party colleagues - the Minister for Justice, Mr McDowell, and Minister of State Mr Tom Parlon.
"What Michael McDowell said at our general council meeting was we should be ready for the election; it may not be as long a term as the last one. The last one lasted five years.
"When you're a smaller party in a coalition government you would be very foolish not to be prepared for an earlier election. That's not to say we think it would happen in 2006."
She said that all the indications were that the Government would remain coherent, stick to the Programme for Government and act like a fresh, new Government after the Cabinet reshuffle which, she said, would happen on September 29th.
Asked what could precipitate an early election, she said: "Incoherence in Government...For example, if we were to return to a tax and spend philosophy, if we were to put at risk the economic success, then I would think that would be a matter of fundamental principle that the PDs could not go along with."
She said she did not want to be portrayed as threatening to pull out of Government "but the economy is fundamental as we go forward. And as people reflect both in my party today and in the larger party in this coalition, we would be very, very foolish indeed and politically very short sighted if we were to . . . engage in a spending spree between now and the next election.
"That will not work, it won't work politically and it would be the last thing that this country needs economically."
Despite some Fianna Fáil apparent unrest over what some claim is the Government's "right of centre" outlook, "not one single backbencher has called for a change in the Programme for Government".
Ms Harney said the PDs had had a crucial influence on the economic outlook since 1997.
She believed Mr McCreevy had acknowledged publicly "that if he had been in a different kind of government, perhaps with the Labour Party, he would not have been able to implement the policies that he implemented over the last seven years. So to a large extent, many of the economic policies that he was able to implement were the policies espoused by the PDs."
Asked about the fact that Father SeáHealy, of the Conference of Religious in Ireland, addressed the Fianna Fáil parliamentary party yesterday, she said: "I think in so many respects I would fundamentally disagree with Father Seán Healy's approach to how you generate economic success and social justice."
While Father Healy's presence at the meeting is part of the party's attempt to be seen to be engaging with the concerns of its critics, Ms Harney said: "The reality is that the policies that he would advocate and has advocated in my view would cause economic disaster. They would lead to high unemployment."