Communications Minister Denis Naughten has said that he is prepared to go to the European Commission to have the law changed to allow part of the licence fee be used to fund private broadcasters.
It would support their commitments to public sector broadcasting.
Denis Naughten said that he does not believe there should be legal barriers to the use of the licence fee - despite internal advice from his Department.
Independent Broadcasters Ireland (IBI) said yesterday that the industry is at a tipping point where stations will soon no longer be able to fund news, sport and current affairs content.
The lobby group stated that a large portion of advertising spend is now going to companies like Google and Facebook.
They have accused the Department of Communications of having a preoccupation with the health of the state broadcaster RTÉ.
Minister Denis Naughten said today that he is open to changing the law to allow the partial funding of commercial broadcasters through the licence fee.
However, a Department briefing released under the Freedom Of Information act stated that such a move would breach EU State Aid rules and could be subject to legal action.
Minister Naughten acknowledged there may be legal issues, but suggested they could be overcome - saying he would bring the issue to Europe if necessary.
The IBI argues that their stations deserve some of the licence fee - given the vast amount of time dedicated to public-service content.
Minister Naughten said that there's a need to fund media to ensure there is reliable journalism that people can trust.
He added that the fake news stories that dominated the US election could become prevalent here if commercial media is not supported.