The deal was agreed by both parties last night, as Fianna Fáil leader Micheál Martin also said the issue of any refunds for customers who had paid could be decided under the next budget.
Water charges are now set to be suspended in six weeks under the deal.
However, several stumbling blocks for Independents, whose support is needed for a minority government, are delaying the deal, which was expected to pave the way this week for a final vote for Taoiseach.
Instead, disagreements between Fine Gael and Independents over judicial appointments, turf-cutting, health, and education are thought to be some of the sticking points.
The three-year deal stops Fianna Fáil from supporting any motions of no-confidence against the government and commits Mr Martin’s party to supporting Fine Gael’s budgets.
Fianna Fáil denies the deal is all but a partnership agreement, and says it will allow it implement its policies — but from opposition.
The deal also commits the Fine Gael government with Independents to:
- Reducing USC for lower and middle income earners;
- Improving supports and services for older people, including possible pension increases;
- Publishing all agreements with Independent TDs or other parties “in full”;
- A 2:1 split between investment and in public spending and tax reductions;
- Speeding up social housing building, removing barriers to private housing, and extending mortgage interest relief;
- Planning to create a five-year health service plan;
- Employing 15,000 more gardaí and instigating a review of where garda stations are located.
However, a number of questions remain about the deal by the two parties when it comes to suspending water charges.
Agriculture minister Simon Coveney last night told the Fine Gael parliamentary party that any constituents who had queries about refunds with water charges should “ring Micheál Martin”.
However, Mr Martin said his party supported the idea of non-payers being pursued for water bills. He said no one could support breaking the law. He also hinted that the issue of any refunds for customers could be dealt with in the context of debate around the next budget.
According to the deal though, charges could be abolished after a Dáil vote is held next April.
Under the deal, water charges will be suspended within six weeks of a government being formed. Within eight weeks, an independent commission will be set up to examine the future of charges and will have five months to issue findings.
At that stage — projected as this December — a cross-party Oireachtas committee will be established and asked to draw its own conclusions from the findings over the following three months.
While this committee’s work timeframe can be extended if required, the deal states a Dáil vote on the future of water charges must be held within one month of this committee’s work. This means a vote could be held next April.
Meanwhile, billionaire businessman Denis O’Brien has waded into the disagreement over water charges, criticising a climbdown by Fine Gael on the issue. A plan to get a commission to examine the future of charges meant it had been “kicked in the air and down the field”, he said.
“The Government was wrong to back down on Irish water,” he told Bloomberg Television. He said as much as €4bn is needed to upgrade the water system and that now was in question.
Mr O’Brien was drawn into the Irish Water fiasco when one of his companies was awarded a contract to install water meters in 2013.