Enda Kenny was accused of undermining promises the inquiry would be independent after he said the terms of reference cannot be agreed until the committee make up is changed to create a Government majority.
The first meeting of the inquiry team — due to take place today — has been suspended because of a dispute over its membership.
The Government is attempting to overturn the result of a vote by the Seanad selection committee last week that appointed Fianna Fáil’s Marc MacSharry to the nine-person committee.
The Government’s preferred candidate, Labour senator, Susan O’Keeffe, did not get selected after she and some of her colleagues failed to turn up to vote, meaning the Government will have just four members compared to the opposition’s five.
Fianna Fáil’s Michael McGrath said the only way the Government could overturn the vote was to “set aside decades of practice and convention and bring a motion to the Seanad to seek to overrule and overturn”.
This would amount to a “power grab” and “would raise the question once again as to why the Government is so determined to control this banking inquiry lock, stock and barrel”.
In the Dáil yesterday, the Taoiseach said: “Obviously there was a voting procedure that took place last week. But in order for terms of reference to be adopted and for a mandate to be given, the Government need to have a majority.”
In response to questions from Fianna Fáil leader, Micheál Martin, he said: “Clearly the situation that applies at the moment is the Government don’t have a majority. But you have to be able to adopt terms of reference. If you don’t have a majority, you can’t do that.”
And he asked Mr Martin: “How do I know what the members will do?”
The Fianna Fáil leader tried to intervene, but Ceann Comhairle Seán Barrett, ruled him out of order and insisted he sit down, before eventually suspending the Dáil for 10 minutes.
Mr Martin later issued a statement saying Mr Kenny’s comments “completely undermined the commitments given previously by Minister Brendan Howlin and others who explicitly assured the public that this inquiry would not be a creature of the Government but would be an independent Oireachtas inquiry.”
He challenged Mr Howlin to state if he could stand over the remarks by the Taoiseach “who appears to believe that it will be the Government that will set the terms of reference and then whip Fine Gael and Labour TDs and senators to approve these and agree them as the basis of the banking inquiry”.