Gilmore: Quitting will not rock the Coalition

Outgoing Labour leader Eamon Gilmore has insisted the Coalition will not be plunged into instability as a result of his resignation as Labour leader. He urged his successor to keep the party in Government until the end of its mandate in 2016.

However, doubt has been cast over the ability of a new leader to achieve the biggest task of agreeing a budget with its Fine Gael partners in the face of an anti-austerity backlash, after Finance Minister Michael Noonan said there is room to ease the €2bn of planned cuts.

While tax and employment data pointed to a brighter fiscal outlook, Mr Noonan said he would have limited scope to ease up on cuts in October.