THE Government is considering running a referendum to abolish the Seanad on the same day as the General Election.
If the proposal is approved, it will lead to an estimated saving of €25m per year.
Two government sources said the Fianna Fail-inspired plan had been discussed at ministerial level in recent weeks and was under active consideration.
It is understood that Green Party leader John Gormley has discussed the plan with Foreign Affairs Minister Micheal Martin and is willing to support it.
He is also personally in favour of reducing the number of government TDs -- but the Government has not made a final decision to proceed with a referendum on either of these two measures.
There was "deep suspicion" last night among the opposition about the plan, which comes more than a year after Fine Gael promised to hold a referendum to abolish the Seanad when it gets into power.
Fine Gael deputy leader James Reilly accused the Government of trying to muddy the waters ahead of the General Election.
"I believe this is a distraction away from the economic fiasco they have created and may be further used to procrastinate in relation to an early General Election," he said.
Mr Reilly said politicians had to lead by example in the current economic crisis, including cutting the number of TDs by 20.
"I think reforming ourselves and reducing the cost of the legislature to the taxpayer is an important move.
"Saving in the region of €30m by reducing the Oireachtas by 35pc, including the abolition of the Seanad is something that should be done," he said.
Defence Minister Tony Killeen denied yesterday that the Government was procrastinating about the General Election.
He said it would take eight weeks to pass the Finance Bill to implement all the Budget 2011 measures, and accepted the most likely date for the General Election was, therefore, mid to late March.
There is a widespread belief in political circles that if a referendum were held on the same day to abolish the Seanad, it would be carried easily.
One Fianna Fail TD joked last night that there would be a "97pc" 'Yes' vote.
Labour TD Pat Rabbitte confirmed yesterday that his party's new public service reform document would include a commitment to abolish the Seanad.
But he criticised calls for outsiders to be appointed to positions of political power because elected politicians did not have the track record or the expertise to steer the ship of State.
He told RTE's 'This Week' that there were specific figures in the business and academic worlds who had been advancing the facile notion that "if only we halved the Dail and drew in this talent from the outside, then everything in the garden would be rosy".
"If that was the system, we would long since have made (former Anglo Irish Bank chairman) Seanie FitzPatrick Minister for Finance," he said.