Role of rotating Taoiseach now on offer for Martin in 'equal partnership'
Enda Kenny is prepared to offer Micheál Martin the opportunity of being Taoiseach for two-and-a-half years if Fianna Fáil signs up to a "full and equal partnership government".
The Fine Gael leader finally met Mr Martin last night and told him he would be "generous and open" in any deal between the two parties, provided it would last a full five-year term.
The 'partnership' would see Fine Gael and Fianna Fáil share the same number of seats at the Cabinet table.
And it is understood Mr Kenny is willing to offer a rotating Taoiseach if that's what it takes to secure the arrangement.
Significantly, the Fine Gael leader told Mr Martin that he wants as many as possible of the 15 Independents who have been involved in talks over the past fortnight to be part of the new government.
Forty days after the General Election, the two men finally met for an hour and 10 minutes last night after the Dáil failed to elect a Taoiseach for a second time.
After the meeting, a Fine Gael spokesman refused to confirm the exact nature of the "formal offer" tabled by Mr Kenny but said it was "for the purpose of forming a sustainable five-year government".
A spokesperson for Fianna Fáil said Mr Kenny had outlined that he believes a minority government led by either party "would not work and that a full partnership government of Fianna Fáil/Fine Gael/Independents would be his preferred option".
However, party sources were immediately sceptical, saying that it amounted to a coalition by another name and the idea of a rotating Taoiseach was "nothing new".
TDs from both Fine Gael and Fianna Fáil will meet their leaders at 11am today to discuss the latest developments.
Neither party managed to convince any Independents to back their leader in yesterday's vote, although Michael Lowry, who has not been at the talks, voted for Enda Kenny.
It has also emerged that the Department of Environment intends to place an order for four million polling cards in the coming weeks.
Officials have advertised online for the cards, which are sent to every registered voter in the country informing them of the date, time and place at which they are entitled to vote.
A spokesman for the Department told the Irish Independent they were taking a "best to be prepared" attitude as the situation remains in a "state of flux".
The meeting between Mr Kenny and Mr Martin took place in a room between Government Buildings and Leinster House just after 8.30 last night.
At a briefing of Fine Gael ministers prior to the meeting, Mr Kenny was warned by colleagues to "not get offside".
Sources say Mr Kenny appeared "tired" as he sought the advice of colleagues.
There was a sense of apprehension expressed by some of those present in relation to some of the demands that are expected to be laid down by Fianna Fáil.
Ministers say there is a sense that a minority government is very much a "last resort" for Fine Gael for fear it would quickly collapse.
"The view in the room is that they would pull it down at their choosing - Fine Gael are clear that it has to be some form of a coalition or we will have another election," one minister said.
Before yesterday's Dáil sitting, Mr Kenny met the 15 Independents but was told they needed more time to pore over Fine Gael's 123-page 'foundation document' for a government partnership.
Sources confirmed several TDs said there was still a long way to go before they would support a minority government - and Mattie McGrath clashed with the acting Taoiseach, who he alleged had described him as "difficult".
Mr McGrath also indicated to the meeting that he would not be in a position to support an arrangement which includes a citizens' convention on the repeal of the Eighth Amendment, as has been proposed by Fine Gael.
Sources told the Irish Independent that between the 15 Independents they have made 103 specific requests that would involve extra spending, and 43 different tax incentives.
Five issues to top agenda in 'temporary little arrangement'
Are you sure a 'Grand Coalition' is not an option?
The preferred option of Fine Gael and most of the Dáil appears to be a coalition between the two big parties.
Micheál Martin is set against the idea – fearing it will open up space for Sinn Féin to rival them at the next election and damage his leadership.
But the question has to be asked before these talks go any further. Fine Gael is willing to offer Mr Martin two-and-a-half years as Taoiseach and seven Cabinet positions if he will enter into a full-blown coalition.
Your minority or mine?
Assuming a traditional coalition is quickly taken off the table, the two party leaders must then argue why they should be the ones to lead a minority government.
By virtue of winning eight more votes in the Dáil yesterday, Mr Kenny is in poll position – but Fianna Fáil is unlikely to admit that reality immediately.
Mr Martin has repeatedly said he wasn’t elected in order to put Enda Kenny back in Government Buildings. That’s a tricky statement to backtrack on, so it may take some time.
Will both sides compromise on water charges?
Even if they get past the first two items on the agenda, there is very little point in Enda Kenny and Micheál Martin holding any talks unless they first show their hands in relation to water charges. Fine Gael say charges are here to stay and that Irish Water is the best way of fixing our ancient system.
Depending on the day, Fianna Fáil say the abolition of charges is a red line issue and Irish Water will be gone with 18 months.
Somebody has to give an inch or there’s no point in going any further in the negotiations.
Is this a temporary little arrangement?
At his final press conference before polling day, Enda Kenny said that the Labour Party would be the only option for a coalition.
He warned that there would be no “temporary little arrangements” with Fianna Fáil because it wouldn’t last. That sort of language has been dropped – but it remains s a serious question. There is a huge distrust between the two parties, with Fine Gael particularly believing that Fianna Fáil will pull the plug on a minority government if they overtake Fine Gael in the opinion polls.
Tax versus spending
Fianna Fáil campaigned on an ‘Ireland for All’ where social provision and investment in public services would trump any tax cuts.
Fine Gael built the bulk of their ‘Keep the Recovery Going’ campaign around a promise to completely scrap Univeral Social Charge.
Both sides will need to find a middle-ground because getting budgets through the current Dáil will be a big ask.
A minority government won’t need the support of the other party on every vote but on money issues the rules will need to be clear.