The Minister for Finance, Mr McCreevy, is resisting pressure from the Taoiseach and other Cabinet colleagues to appoint an economic adviser to help him manage the country's worsening finances.
The Irish Times has learned that Mr McCreevy is not now to fill the proposed adviser post, despite the fact that the job had been offered to a high-profile Dublin-based economist.
There is growing unease at Cabinet level at the downturn in the economy.
In recent weeks, Ministers have been forced to come up with a total of €300 million in cuts, with Mr McCreevy determined to bring in a Budget surplus this year.
Mr Ahern believes that Mr McCreevy needs an adviser to steer him during the difficult economic times ahead. The appointment would have been a new departure for the Minister, who has never felt the need to avail of economic policy advice from outside the Department of Finance.
He is the only Government Minister not to have a special adviser.
A spokesman for the Minister said yesterday that he had no comment to make. While Mr McCreevy has ruled out the appointment for now, a source said that it is something he may come back to in the future.
The appointment of an economic adviser first arose in early June after Mr McCreevy was strongly criticised over the huge cost of the Government-sponsored Special Savings Incentive Scheme.
It emerged that the scheme will drain more than €517 million from the Exchequer for each year of its operation.
This cost is significantly higher than the €300 million in annual charges estimated by Mr McCreevy just before the scheme closed at the end of April.
It is also running ahead of the tentative annual costing of €127 million made by his Department before the savings scheme was announced in 2001.
Sources said yesterday that Mr McCreevy believes he has done a good job for the last five years and can continue to do so, despite the current economic blip.
But sources also said that the Minister felt it would have been wrong to incur the expense of appointing an adviser at a time of major public spending cuts.
Senior economists in the private sector can expect to earn packages between €150,000 and €200,000 a year.
Sources added that Mr McCreevy is keen to show his Cabinet colleagues that the job can be done without bringing in people from outside the Civil Service.
The Department of Finance has to sign off on the appointment of all advisers by Ministers and Mr McCreevy has been carefully screening all such requests from colleagues.