Ministers are working on a proposal to improve third-level education access programmes rather than bring back fees in an attempt to end friction between the Coalition parties on the issue.
Sources in Fianna Fáil and the Progressive Democrats said yesterday they believed there was now no prospect of the reintroduction of fees for students this autumn.
Efforts were under way to agree a package of measures to address the concerns of the Minister for Education, Mr Dempsey, about inequality of access to third level.
While the Taoiseach has promised to resolve the issue before exams start on June 4th, there was no confirmation yesterday that the matter would be discussed at Tuesday's Cabinet meeting. Mr Dempsey said he would bring proposals to the Cabinet "within weeks", and his spokeswoman would not elaborate on this later.
Government sources confirmed yesterday that no memorandum for Government on the issue had yet been circulated to Ministers, indicating that no major proposal has been finalised.
Behind-the-scenes talks among Ministers and officials yesterday focused on schemes such as top-up grants and area-based initiatives designed to encourage students from disadvantaged backgrounds to enter third level.
Yesterday Mr Dempsey insisted he would press ahead with his proposals irrespective of the outcome of a review of the third-level sector by the OECD. But political sources say the review, which is certain to examine the question of fees, could still provide part of the solution to the impasse with the PDs over fees.
The Department said the OECD study, first planned late last year, would address longer-term issues. The current fees review, it insisted, was separate.
The Union of Students in Ireland (USI) claimed yesterday that the Government is on the point of raising the student registration fee to €1,000 from October. But this was denied by Mr Dempsey, who said he would make no comment on what he called a flight of fancy.
Mr Colm Jordan, the USI president, said: "All this talk about the return of fees has been part of an elaborate ploy to put the worst-case scenario before the public before increasing these backdoor fees."
The Tanaiste and the Minister for Finance both expressed wholehearted support yesterday for Mr Dempsey's stated aim of improving access to third level for students from disadvantaged backgrounds.
However, Mr McCreevy signalled agreement with Ms Harney's opposition to the reintroduction of fees, even though he believed their abolition in 1995 was "the most socially regressive step ever done by an Irish government".
"The question of bringing them back has to be looked at in the context in which we now live, and individuals have built the abolition of fees into their own financial calculations," he said.
He restated the line given by several Fianna Fáil figures in recent days, that Mr Dempsey's aim is to increase the numbers of people from disadvantaged backgrounds in third level, and that he had not yet made any proposal to Cabinet in relation to this. The consistency with which this line has been used in recent days reflects the fact that Ministers are hoping for a compromise.
The Tanaiste said yesterday she agreed fully with Mr Dempsey's aim of improving access to third level. "The only difference is over how we would fund increased access," she said.