The Labour Party appear to rule themselves out of government, after receiving a letter from Fianna Fáil and Fine Gael regarding their response to the Framework Document.
Labour had flagged concerns about the promise made by Fianna Fáil and Fine Gael not to increase taxes on high earners in the expected recession post-Covid-19, saying that by ruling out such increases, it would be difficult to avoid austerity or vulnerable groups being unfairly targeted by cost-saving measures.
These issues were raised in a letter by leader Alan Kelly, back to Micheál Martin and Leo Varadkar two weeks ago, before receiving a reply on Monday.
"I will discuss it with my colleagues in the Parliamentary Party over the coming days," Labour Party Leader Alan Kelly said.
"It is clear Fianna Fáil and Fine Gael are now united on economic policy and have taken a position on taxation which is concerning to us, however I do welcome their commitment that the next Government would honour the existing public service pay deal.
"We will respond in more detail to the policy issues in the letter later in the week.
"I welcome the acknowledgement by the leaders, of our view on government formation.
"There are four parties with more TDs in the Dáil than the Labour Party, and any three of those can form a government with a majority.
"Detailed negotiations are now underway on government formation between Fianna Fáil, Fine Gael and the Green Party, and if successful would command a majority in the Dáil.
"We respect the mandate of the participants, and for now they should be given the space and time to reach a conclusion."
Likewise, when asked on Friday if the party were considering government formation after Leo Varadkar said that the door was still open to Labour, TD Aodhán Ó Ríordáin said that the two larger parties had "found someone else to dance with".