Details of the deal for the ex-Fás boss emerged when the Public Accounts Committee grilled senior officials from the state training agency on Thursday.
Fine Gael TD Alan Shatter said Ms Coughlan should appear before the same committee to deal with the many outstanding questions, not least why her department failed to seek legal advice before granting the deal.
“Minister Coughlan contends that she agreed to increased pension arrangements for the former Fás director general in order to avoid a legal action. The revelation of her failure to seek legal advice, even from the Attorney General it would appear, makes this explanation incredible,” Mr Shatter said.
“It is clear that the Tánaiste has questions to answer and these answers should be made to the Dáil Public Accounts Committee, not merely to the Green ministers at cabinet as suggested by Senator Dan Boyle.
“This massive pay-off for an individual who presided over serial abuses of the public purse is an affront to the taxpayer and the minister should make a full explanation before the committee,” Mr Shatter said.
Labour TD Roisín Shortall said it “defied belief” that Ms Coughlan had not sought legal advice on the deal when it was being negotiated.
“What appears to have happened was that Mr Molloy was asked to name his price for departing quietly and that the Tánaiste willingly signed the cheque,” she said.
It emerged yesterday that Ms Coughlan is seekinglegal advice in a bid to see if the deal can be revisited.
But Ms Shortall said this was a clear case of “trying to bolt the stable door long after the horse has bolted”.
It wasn’t just opposition TDs demanding a full explanation, however. Ms Coughlan’s Fianna Fáil colleague, Mary O’Rourke TD, said it was time for the Tánaiste to come out and “tell the tale in full”.
Another Fianna Fáil TD, Mattie McGrath, told the Eamon Keane show on the NewsTalk radio station that the Tánaiste should be moved as part of a Cabinet reshuffle.
But Sinn Féin insisted that Ms Coughlan should resign following her involvement in the golden handshake.
“The Tánaiste must resign after her involvement in this sordid matter,” Sinn Féin TD Arthur Morgan said. “The deal made with Rody Molloy should be reneged on.”