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Photo that may cost Gallagher the presidency

THE picture shows Armagh businessman Hugh Morgan and Taoiseach Brian Cowen at a Fianna Fail fundraising event in Dundalk in July 2008.

Mr Gallagher is accused of having facilitated the meeting between the pair and of delivering the photo to Mr Morgan.

The convicted fuel smuggler alleges that Mr Gallagher himself collected a €5,000 donation.

Mr Gallagher says he was "shell-shocked" by the claims which were first made by Martin McGuinness during Monday night's Frontline debate. He insists he did not collect the cheque.

The Cavan man said the fundraiser was "no different from anybody who stands at a church gate collection or anybody who sells tickets or holds fundraising events".

The controversy seriously disrupted the momentum of Mr Gallagher who had a commanding lead in the opinion polls but he now says he has put the matter behind him.

"We put in a good campaign, a very clean campaign, and a bit of distraction this week with negativity but we're back on track. There is no issue to be addressed. I stand over everything I've done," he added.

Mr Morgan produced the photograph via his solicitors.

The businessman, a major sponsor of GAA activities and owner of Morgan Fuels in Armagh, was convicted of fuel smuggling in the late 1990s.

He released copies of the stub for the €5,000 cheque made out to Fianna Fail and diary entries.

Mr Gallagher repeated his denials for a second time that he had picked up the donation in person in June 2008.

"I apologise for any confusion. I wasn't sure whether, could he have given me a cheque to pass on to Fianna Fail, it wouldn't be a standard practice and I was unclear as to whether or not he gave me something," he said.

Mr Morgan says Mr Gallagher phoned him twice and visited his premises twice -- once to collect the cheque and again to deliver the photograph.

"In return for the €5,000 I was promised a private audience with the Taoiseach... At the end of the night Sean Gallagher introduced me to Brian Cowen and facilitated a photo".