FINE Gael backbenchers are hopeful that a new embassy to the Vatican could be up and running in the new year.
Tanaiste Eamon Gilmore previously shut down the Irish embassy to the Vatican two years ago and appointed a senior civil servant in Dublin to act as a "non-resident" ambassador instead.
He has said he is willing to consider re-opening the embassy.
And his review of the embassy network will be discussed at a meeting of the Oireachtas Foreign Affairs committee tomorrow.
Its chairman, Fine Gael TD Pat Breen, said he was very hopeful that Mr Gilmore would be making an announcement shortly about re-opening the Vatican embassy in the new year.
"Shutting down the Vatican embassy caused a lot of unnecessary bad publicity. It was as if Ireland didn't want to have a relationship with the Vatican, which is totally untrue," he said.
One possibility is the "two ambassadors, one building" model which is being used in Rome by Britain and soon by the USA.
Britain has got around the traditional Vatican requirement to have an ambassador operating in a separate building from the ambassador to Italy.
Their building contains separate entrances for each ambassador.
It had been incorrectly reported that the US was going to close its embassy to the Vatican. But the US is moving its embassy from its current location to a shared facility with the United States Mission to Italy and the Mission to the United Nations.
A spokeswoman for Mr Gilmore insisted that no decision had been made yet on re-opening the embassy to the Vatican, but said that a review of embassies abroad would be finished in the coming weeks.