The Government is facing a constitutional challenge in the new year to the ongoing controversial payment of an annual €3.1bn in promissory notes that were taken to pay off the debts of the discredited Anglo Irish Bank.
The Sunday Independent has learnt that the court case, which is expected to last for four days, will begin on January 22 in the High Court.
The challenge has been taken by businessman David Hall, who claims the notes are unlawful on various grounds, including the failure to properly consult the Dail.
The founder member of the New Beginning group of business people and lawyers – which has been leading the response to the mortgage arrears crisis – believes the Irish people have not been properly consulted over a deal where, with the alleged connivance of the Central Bank and perhaps the European Central Bank, bondholders got paid.
Mr Hall is expected to claim this was a deal where the Irish people were not consulted and their representatives were bypassed, "in a flagrant breach of the Constitution, with no democratic legitimacy".
In such circumstances he is also expected to claim this issuing of the promissory notes to Anglo, EBS and Irish Nationwide Building Society was unlawful since the decision to issue them was never approved by the elected members of the Dail.
It is also believed there are concerns that the legislation may have breached Article 15.2 of the Constitution that says "no other legislative authority" such as the ECB or Europe "has power to make laws for the State".
The case is expected to be profoundly embarrassing for the Government, which may find itself defending a promissory note system that it is trying to persuade Europe to either abolish or reform.
The case has also arrived at a point of acute political danger for Finance Minister Michael Noonan in the wake of a widely reviled Budget and the escalation of doubts about the effectiveness of his negotiating strategy in Europe.
Concern is particularly growing about Mr Noonan's approach in the wake of comments by ECB president Mario Draghi last week that appeared to pour cold water on the prospect of a deal on the promissory notes in January.
Any failure to secure such a deal could plunge the Government into a profound political crisis, whilst the potential for domestic embarrassment is likely to be compounded by the revelation that the senior counsel leading the case is the former Attorney General and high-profile Labour adviser John Rogers.
This means the case is likely to evolve into a legal war of wits between two Labour legal grandees, since the current AG, Maire Whelan, who has recently suffered a number of embarrassing legal setbacks, was the nominee of Mr Gilmore.