But Transport Minister Leo Varadkar said there is "no breakdown" between the Government and the ECB.
It comes after reports claimed the ECB rejected the Government's proposals for a deal, which would be a massive setback for the Coalition.
It has effectively staked its reputation on securing a deal, with Taoiseach Enda Kenny and Tanaiste Eamon Gilmore repeatedly and forcefully saying agreement must be struck for Ireland to successfully exit the bailout at the end of the year.
The Government wants to turn the promissory notes into long-term bonds, which the ECB could add to its portfolio.
But news agency Reuters claimed the ECB decided this would amount to "monetary financing" of the Irish Government, which is banned under Article 123 of the EU Treaty.
However, Mr Varadkar said the Government's proposals were not dismissed.
"They were not rejected, there was no breakdown but there is no agreement yet," he said.
There is agreement on "a number of issues, not on others".
Mr Varadkar said the promissory notes were discussed at an ECB meeting last Wednesday and acknowledged that issues had arisen.
"There was no objection, there was no breakdown," Mr Varadkar told RTE's 'The Week in Politics'.
Communications Minister Pat Rabbitte also warned there would be "profound consequences" if a deal was not struck before €3.1bn was due to be paid at the end of March.
Mr Gilmore said a failure to secure a deal would have a "potentially catastrophic effect on Ireland". He made his comments at an EU- Latin America summit in Chile.
Last night, he added: "Time is not on our side. We have entered a critical phase in this process, and a major deadline is looming. The sacrifices of the Irish people must not be squandered now." The Government wants to extend the annual €3.1bn payments over a longer period of time, effectively lengthening the "mortgage", as Mr Kenny has said.
The Reuters report said the ECB's governing council discussed the Irish proposal last Wednesday and Thursday but decided it amounted to "monetary financing".
Concern It quoted an ECB source as saying: "The ball is now back in the Irish court. There is a real concern in the governing council because you can create precedents when you do things for one country.
"Then others may say, 'Why not for us?' We must be sure the solution doesn't open a window in terms of monetary financing." But Mr Rabbitte said "there is no basis for the Reuters report – it is not the case. The discussions are going on and I believe they will be concluded by March 31. Monetary financing was never on.
"The task of the ECB is not to make grants, they make loans to banks, not to states, throughout the union.
"What is involved here is a restructuring and re-engineering of the particular promissory note." He also said he stood over comments he made last year when he insisted Ireland would not pay the €3.1bn due in March.