Kenny to suspend water charges in deal to be returned as leader
Fianna Fáil demands new commission as bills shelved for three years
Fine Gael is poised to surrender to Fianna Fáil's demands to suspend water charges for a limited period, in a move that could finally see Enda Kenny return as Taoiseach.
Mr Kenny is set to agree to a suspension of charges for all Irish Water customers, pending the framing of a new charging regime which includes waivers and generous free allowances.
But while it will pave the way to power, the decision to suspend charges will be highly sensitive politically.
It is sure to spark a backlash from the 950,000 households that have already paid their bills.
Central to the agreement between Fine Gael and Fianna Fáil will be the establishment of a new commission which will examine the re-introduction of charges, once the suspension process kicks in.
But there remains significant differences between the two parties, with Fianna Fáil leader Micheál Martin seeking a three-year suspension of charges in return for a written agreement to support a Fine Gael-led minority government for the same period.
Mr Kenny and Mr Martin spoke on a number of occasions over the telephone yesterday and met briefly at the Arbour Hill commemoration.
The issue of the suspension of charges was discussed at a meeting on Saturday, during which Mr Kenny is believed to have expressed a willingness to concede, as long as the charges are reinstated following the work of the commission.
Their negotiating teams are on standby to resume talks today after the issue of water charges caused the negotiations to stall last Friday.
But tensions are running high in both camps, with a number of Fianna Fáil figures yesterday urging Mr Martin to consider a snap election.
There is a strongly held view among Fianna Fáil TDs that an election would put Fine Gael on the back foot, because they would be unable to replace Enda Kenny as leader for several weeks.
One senior Fianna Fáil figure close to Mr Martin yesterday said the issue had reached its "most precarious state" and the prospect of an election over water is now 60:40 in favour.
Throughout yesterday, senior Fianna Fáil figures warned Fine Gael that they will not alter their stance on charges. But Fine Gael ministers accused Fianna Fáil of being unwilling to compromise fairly on the issue.
Acting Foreign Affairs Minister Charlie Flanagan said it was "imperative" both parties found a device to defuse the row if an early election was to be avoided.
He said water charges were an issue in the February election, but other issues like housing, homelessness, health and mental health were a higher priority for voters. Mr Flanagan said: "61pc of people paid their water charges. What do we say to them?
"Conceding to these Fianna Fáil demands would not keep faith with those who obeyed the law and it would raise doubt about the principle of paying for water.
"Both parties approached this issue from very different perspectives. But hard stances now will not help us achieve the desired outcome of these talks, which must be a government."
He said abolishing Irish Water would squander €110m in taxpayers' money already spent on its establishment.
Meanwhile, speaking at a 1916 commemoration event in New York, acting Environment Minister Alan Kelly said abolishing Irish Water now would be "political, economic and environmental sabotage".
But speaking on RTÉ's 'This Week' programme, Fianna Fáil TD Marc MacSharry said the election result meant there was "no mandate" for water charges.
Asked by the Irish Independent about the feeling towards Mr Kenny, Mr MacSharry replied: "The leadership of Fine Gael is a matter for them but personally my view is if people in Fine Gael feel he's the only barrier to respecting the will of the people and the Dáil on Irish Water, he should be replaced."