The Health Service Executive will have to conduct a third major recruitment campaign in an attempt to fill its €400,000-a-year post of chief executive.
This follows the decision by a second senior doctor, Prof Brendan Drumm, to walk away from the job yesterday, two months after he had been offered it.
The move plunges the Government's health service reform programme into a fresh crisis and means the HSE, which is responsible for the day-to-day running of the health service, is unlikely to have a chief officer for several more months. It could even be next year before a person is now found to fill the post.
Prof Drumm had, according to Minister for Health Mary Harney, been offered the job, but a failure to reach agreement on one aspect of his contract led to negotiations with him irretrievably breaking down.
Now the process of finding a replacement candidate for the post, which was already turned down by Prof Aidan Halligan, deputy chief medical officer of the National Health Service in the UK, begins again.
The HSE board met yesterday to discuss the latest crisis. Its chairman Liam Downey said the HSE recruitment committee is to decide on the best route forward.
Sources close to Ms Harney said last night, however, that rather than returning to other candidates shortlisted for the post when Prof Drumm was selected, a fresh recruitment process was likely.
This could include making approaches to candidates who were already interested in the job, like consultant geriatrician Dr Cillian Twomey, but the process is expected to take months and thus delay the reform programme.
The talks broke down, Mr Downey said, because "it was not possible for the HSE to enter into long-term financial commitments with Prof Drumm relating to the period after the term of office".
He was offered a five-year contract, with provision for it to be extended to eight years.
Prof Drumm said he wanted the HSE to agree to his returning to a post equivalent to his present one after his contract expired. He is a consultant at Our Lady's Hospital for Sick Children in Crumlin and professor of paediatrics at University College Dublin.
Ms Harney said that in the interest of taxpayers she couldn't agree to this. She said she "couldn't justify having a bottomless pit" to pay the new head of the HSE.
She also confirmed it had been agreed he would get €1 million to pay for consultancy fees. This would pay for a team of six whom Prof Drumm wanted to bring with him to spearhead the reform programme.
Ms Harney described Prof Drumm as an excellent candidate and said she was disappointed he would not be taking up the post.
Prof Drumm, too, expressed disappointment that the negotiations had ended unsuccessfully and said he was saddened if he was being portrayed as being too greedy in terms of what he wanted built into his contract.
He emphasised he had told the HSE from the beginning that he wanted a guarantee he could return to his current job and he couldn't understand how it had been left to the last minute to point out to him that this couldn't happen.
"If a set of events were set in train for a process that was never possibly going to be allowed to be achieved ... then I have to assume that the whole trail of events I dealt with ... were actually a set-up," he said.
Opposition parties said this latest difficulty to confront the beleaguered health service was a reflection on Ms Harney. Labour Party health spokeswoman Liz McManus said the decision by Prof Drumm to turn down the post was "a damning vote of no confidence in the Minister and in her political leadership of the health sector".
Fine Gael's health spokesman Dr Liam Twomey said Prof Drumm's decision to withdraw from the post left the Government's healthcare reform programme in a mess.