Fine Gael and Fianna Fáil have edged closer to agreeing a government formation deal in a bid to avoid a snap election, after the government party was forced into a major water charges climbdown, writes Fiachra Ó Cionnaith, Juno McEnroe, Daniel McConnell and Elaine Loughlin.
With the threat of a second election looming, acting Taoiseach Enda Kenny's party on Tuesday night made a fresh concession to Fianna Fáil, offering the effective suspension of water charges for up to 18 months.
The move - which one Fianna Fáil negotiator said meant "water charges as you know them are gone" - involves an initial nine month suspension of charges while an independent commission is set up.
This commission will then pass on its conclusions to an Oireachtas committee, which will be given nine more months to decide on a new charges system, effectively meaning fees will be suspended for 18 months.
Fine Gael's deal also involves an acceptance that the Dáil will have the final say on Irish Water, and that if a motion is passed to scrap it or suspend charges indefinitely this will take place.
However, one Fianna Fáil negotiator said while Fine Gael still expects charges to be re-introduced alongside allowances and metering after this period, "water charges as you know them are gone".
While no deal has been firmly agreed, both parties accepted significant progress has been made, with a Fine Gael minister saying a deal could be agreed by tonight and a cabinet formed by next Tuesday.
A long day of talks finished up with negotiating teams from both parties returning back to their party leaders.
Despite Fine Gael offering a series of concessions to Fianna Fáil, acting Agriculture Minister Simon Coveney insisted on leaving Tuesday night's talks there has been “no cave-in”.
Earlier in the day, senior figures in both parties had remained resolutely opposed to a compromise.
Acting Finance Minister Michael Noonan predicted a deal may not be agreed, while Fianna Fáil negotiator Barry Cowen warned that Fine Gael might have to accept “the will of the Dáil” on water charges.
Dáil statements on water charges will now be held on Wednesday afternoon. While Sinn Féin will push for a vote, none is scheduled.
Before the deal was offered, Fine Gael ministers held a hastily organised meeting on Tuesday night ahead of the debate, where they were told backbench opposition to such a deal — to avoid a return to the ballot boxes — is not as strong as first feared.
Fianna Fáil negotiator Michael McGrath said the only way to resolve the stand-off was to put the matter to the Dáil and allow TDs to decide what happens next, saying the issue has reached its “end game”.
Any pact is now expected to see both sides conceding ground but a final deal being put on the table, possibly before the weekend.