The Irish Independent has learned that governor Ned Whelan sought advice from the Department of Justice following repeated requests from the Quinn family to release him to attend his granddaughter's Christening on Saturday.
Mr Whelan, who received fresh submissions yesterday from Mr Quinn's lawyers, sought advice on whether temporary release could be granted.
The matter has been referred back to the governor, who will decide in the coming days whether to release Mr Quinn or detain him until January 4.
Mr Shatter said last night that he does not comment on individual cases, adding that he will consider applications for temporary release over the Christmas period as has been the case in previous years.
Mr Quinn (66) is serving a nine-week sentence for contempt of court.
His daughter, Ciara, his solicitor and a local priest from Cavan have all written to Mr Whelan appealing for the businessman to be granted temporary release to attend the christening and spend the following five days with his family.
Cavan Town Council yesterday unanimously passed a motion calling on the governor to grant Mr Quinn temporary release for Christmas.
Deputy mayor and Fianna Fail councillor Paddy Conaty said a fax was sent to Mr Whelan outlining the council's request yesterday morning.
"I made the point that we're not judging, it's not our business to do that and nobody is above the law," said Mr Conaty.
"At the same time, given the man's age and the huge amount of good he did for the area, that can't just simply be forgotten."
Mr Conaty said he understood Mr Quinn was "generally in good form and settling in well" in prison. However, councillors felt he should be released for the sake of his family.
"He's that type of man, he'd be able to stick it out, but it's for his family," he said.
A spokesman for the Irish Prison Service (IPS) said the list of prisoners being granted temporary release for Christmas has not yet been finalised.
The decision on who gets out is made by individual governors in conjunction with IPS operations directors.
While he could not comment on individual cases, the spokesman said governors would consider any submissions they receive as part of the decision-making process.
Separately, the High Court has ruled that the children and other family members of Mr Quinn must pay the legal costs related to their pending cross-examination over their bank accounts and assets. The questioning will take place at the Commercial Court on January 24 and 25.
Mr Justice Peter Kelly yesterday granted an application by Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, for the costs of a hearing to cross-examine, but placed a stay on it pending the outcome of the bank's action against the Quinns.
Barrister Ross Aylward, for the Quinns, had asked the judge not to award costs pending the outcome of the cross-examination, including a decision whether his clients had provided all the documents they could.
Barrister Barry O'Donnell, for the bank, said it was entitled to costs in circumstances including where more documents were provided on the eve of the application hearing despite a "strenuous" assertion that full disclosure had been made.