Tánaiste Joan Burton has warned Labour Party members to be ready for a second election as talks on the formation of government remain deadlocked over water charges.

After two sessions of talks between Fine Gael and Fianna Fáil negotiators yesterday the future of Irish Water emerged as a serious obstacle to agreement on how a minority government can work.

In a letter to members, Ms Burton said the party general secretary was making provision for an election and had been in touch with candidates in recent days.

“We will be ready should another election occur,” she said.

Fianna Fáil insists that Irish Water should be abolished, though it included the establishment of a “national water directorate” in its manifesto.

Sources say that process to deal with the future of Irish Water could be established, leading to speculation that a commission could be set up to decide the future of the utility.

The two parties remain divided on the principle of paying for water, however. Fianna Fáil fears that a failure to abolish charges will be used against it. Fine Gael, on the other hand, has repeatedly committed itself to maintaining a charge.

Progress

However, both sides are said to have made significant progress on the arrangements to facilitate a minority government. Chief among these is a “no surprises” rule – frequent briefings for Fianna Fáil by government officials.

Fine Gael has baulked at some of Fianna Fáil’s demands, with sources complaining privately to each other that they were being criticised for “not clearing up Fianna Fáil’s mess quickly enough”.

Fine Gael sources also suggested some mechanism to review the structure of Irish Water could be proposed, along with waivers and other measures to reduce the costs of bills.

They suggested that such measures could be distributed as welfare payments but have consistently stressed that the principle of paying for water is fundamental to Fine Gael. An overhaul of Irish Water is also under consideration although Fine Gael is adamant it will stick to its position that a national utility is paramount.

Fianna Fáil sources, however, said the waivers would not be sufficient and held to the party’s position that charges must be suspended for a period of time. Fianna Fáil’s manifesto commits the party to suspending charges for five years and abolishing Irish Water.

Waivers

On Fine Gael’s position of greater waivers and welfare payments, a Fianna Fáil source said: “That won’t be enough.”

In Ms Burton’s message to Labour members, which was prompted by media speculation about the party’s potential involvement in a minority government, she said the party had a responsibility to consider its role in the formation of a stable government.

Along with Ministers Brendan Howlin and Alan Kelly, she met acting Taoiseach Enda Kenny and Minister for Finance Michael Noonan in what she described as a listening exercise.

Ms Burton said the country needed a stable government and the Labour Party had to “at least consider our role”.

She added: “And to be clear: any such decision on returning to government would be for the members to make at a special delegates’ conference.

“Since election weekend, however, I’ve made clear that other parties and groups, including the Independents as a bloc, got the mandate to govern – and it remains my view that they should step up to the plate.”