Fianna Fáil and the Greens are to continue discussions on a coalition government deal today after the adjournment of intensive talks last night between Taoiseach Bertie Ahern and Green Party leader Trevor Sargent.
It is understood the parties have reached agreement on a number of outstanding contentious policy issues, but that no consensus has yet been reached on the formation of the new government and the share-out of ministries.
Speculation intensified that a final deal can be struck today to allow Mr Ahern to be re-elected Taoiseach, with the support of the Progressive Democrats and four Independents, when the new Dáil convenes on Thursday.
After the talks adjourned last night, Fianna Fáil negotiator, Minister Seamus Brennan, said the "number and extent of issues has narrowed down considerably". He said the outstanding issues were a mixture of policy and government formation.
He said the issues between the two parties were now contained in one draft document but "nothing is agreed until everything is agreed".
If a deal is agreed the Green Party is expected to call a meeting of its membership for Dublin tomorrow afternoon to ratify it.
Speaking after his meeting with the Taoiseach, Mr Sargent told reporters at Leinster House: "There are some outstanding issues. We have made some progress."
Discussions would continue today, he said: "We hope we can make further progress." He added that, "There are still some matters that are going to have to be addressed and we can't overlook them. I can't foretell what the outcome is going to be."
Regarding the prospect of a Green Party convention to consider any proposed deal, Mr Sargent said: "We will be certainly telling our members that there is a possibility of a meeting on Wednesday evening."
The two leaders met privately without any officials present. "I think everybody is serious about putting together a stable government," he said. "There is still a lot of drafting to be done." They were "working off a number of documents" but there was further drafting to be done "and textual changes". He added: "There is a programme of government which we are working on" and this contained "many pages".
Mr Sargent, who said there was "a very good working relationship between the two sides," refused to disclose whether the role of Mary Harney in any possible coalition had been discussed, adding that the focus was "policy-based".
Mr Ahern and Mr Sargent met in Government Buildings for two hours after a day of intensive contacts and swapping of policy documents between negotiating teams from the two sides.
The talks had resumed after difficulties led to the collapse of talks last Friday after six days of negotiations. Contact was resumed on Sunday.
After the adjournment of talks at 9 last night Mr Brennan said progress had been "very good" but there was work still to be done today. He said both sides were not there yet but in his view today "is the final day".
He said Fianna Fáil was conscious of the time pressures the Green Party was under, because of the requirement to hold a meeting of members. The parties were working to a definite time frame, he said.
Asked if the two leaders had discussed government formation Mr Brennan said: "If the two leaders met for two hours within a couple of days of a new government you will be fair to speculate that they discussed that."
It is understood that Mr Ahern has almost secured the support of the Progressive Democrats in a cross-party coalition, and talks with four of the five Independent TDs are well advanced.
Kerry South Independent, Jackie Healy-Rae, signed up to supporting the government yesterday after securing commitments on local constituency matters.
He refused to disclose the terms of their agreement, describing it as "a private, personal document". But he added: "I've signed up a deal this evening for five years and I'm absolutely delighted that the people that will benefit here are the people of south and south-west Kerry."