NEGOTIATIONS aimed at re-opening the Vatican embassy in Rome on the same site as the Italian embassy are taking place with church authorities, according to the head of the Department of Foreign Affairs.
David Cooney -- who is also Ireland's non-resident ambassador since the embassy closed -- told the Dail Public Accounts Committee that the Vatican has rules against a country having one embassy or ambassador serving both Italy and the Holy See.
Other countries have been allowed house their Italian and Vatican embassies in the one building.
But Mr Cooney said he had been talking to Vatican officials on the possibility that Ireland could use Villa Spada in Rome, which housed the Vatican embassy, for both, adding that it depended on more resources being made available.
However, he was adopting an approach of "the less said, the better", since the Vatican would be more likely to relax its rules for Ireland if the negotiations didn't draw the attention of other countries seeking similar treatment.
He also said nobody in Government asked his department to close the embassy, and insisted it was on a cost-cutting shortlist drawn up by his officials.
"No member of the Government ever came to me and said: 'I want to close the Vatican embassy, make it happen'."
He said it was the only Irish embassy around the world that did not have trade, consular or EU duties.
As part of budget cutbacks, Mr Cooney said his department came up with a number of options, which included closing embassies in East Timor and the Vatican together, or East Timor, the Vatican and Tehran, Iran, together.
The Government chose the second option, and the decision was announced by Tanaiste Eamon Gilmore last year.
Under questioning from Fine Gael TDs Kieran O'Donnell and Eoghan Murphy, Mr Cooney said closing the Vatican embassy would save €1.175m over a full year.
Villa Spada, where the embassy was based, is the biggest building in the department's €148m worldwide property portfolio. The nearby Italian embassy is being moved from its rented headquarters into the renovated Villa Spada.
Although in Rome, Villa Spada is not within the Vatican city limits. It sits on a junction and has three different sides on three different streets.
Mr O'Donnell asked if both the Vatican and Italian embassies could be housed in the same building but have entrances on different streets, and thus, different addresses.
Mr Cooney said he was speaking to people in the Vatican about allowing this to happen, but stressed that there has to be funding in place from central government.
PAC chairman John McGuinness asked Mr Cooney if money could be saved by housing embassies in the same buildings as other state agencies with offices abroad.
Mr McGuinness said the IDA and Enterprise Ireland had offices in the same cities as Irish embassies. Dermot Quigley, a principal officer in the Department of Public Expenditure and Reform, said his department would "in principle" be in favour of such an approach.