ANALYSIS: An unexpected windfall payment to the Tánaiste's department helped pay for Mr Dempsey's deal, writes Arthur Beesley, Political Reporter.
The deal to avoid reintroducing college fees was agreed after the Taoiseach, Mr Ahern, initiated dialogue late last week with the Tánaiste, Ms Harney.
With the Minister for Education, Mr Dempsey, making a strong defence of his plans on Wednesday night, it had become clear that a significant effort would be required to defuse the tension between Fianna Fáil and the PDs.
The compromise was reached at a relatively brief meeting on Saturday afternoon at Mr Ahern's constituency office in Drumcondra, Dublin. In addition to Mr Ahern, Ms Harney and Mr Dempsey, the meeting was also attended by the Minister for Finance, Mr McCreevy.
Sharp divisions over fees had emerged a week earlier, after Mr Dempsey told a meeting of the Fianna Fáil parliamentary party that he would bring proposals to the Government within weeks. This followed a review by the Department of Education that had been ongoing since last September.
But in addition to internal Fianna Fáil reservations about the plan and the PDs' staunch opposition to it, the separate issue of the Leaving Certificate exams ignited the controversy.
The exams start next Wednesday and the sense emerged that the uncertainty over the possible reintroduction of fees next September would only make matters more difficult for students.
The initiative to resolve the matter was signalled in earnest when the Chief Whip, Ms Mary Hanafin, said the uncertainty over fees should be resolved before the exams started.
With Mr Dempsey claiming a moral argument, with a commitment to use money raised from fees paid by wealthy parents to increase access for disadvantaged children, an increase in funding offered an obvious way out for the Minister.
But as a long series of health cutbacks attest, the Exchequer finances did not offer an opportunity to increase funding.
This position was made clear several months ago by Mr McCreevy, who said his refusal of supplementary funding for the Eastern Regional Health Authority would be enforced "without exception" throughout the public sector.
If this created a severe problem for Mr Dempsey, help was at hand in the form of an unexpected windfall received three week ago in the Ms Harney's Department of Enterprise, Trade and Employment.
The "windfall" was an unanticipated payment of €12 million to the Department from a sale of capacity on a broadband telecoms network funded by the Government in a joint venture with the US group Global Crossing.