Fergus O'Dowd's loss to Independent Catherine Connolly in the vote for the new leas ceann comhairle role has been viewed as a further embarrassment for the Fianna Fáil, Fine Gael and Green Party coalition.
Fine Gael's Fergus O'Dowd had been the agreed government candidate for the role.
The Government had 84 available votes, with Mr O'Dowd only garnering 74. Sources say "a post mortem" is underway in the aftermath of the result. As the vote is held in a secret ballot, it is not known who defected.
One source said that the suspicion is mostly with Fianna Fáil, which had agreed in a parliamentary party meeting to back Mr O'Dowd "through gritted teeth" but there are potentially Fine Gael and Green Party colleagues who also voted against the Government.
It's understood Taoiseach Micheál Martin told his party colleagues to stop "briefing against the government" at a parliamentary party meeting on Wednesday night.
There is also the potential that government TDs didn't show up in adequate numbers to swing the vote.
The Dáil register was checked immediately after the shock upset for the Government, according to sources present.
"Everyone's in the same boat, total shock, we expected Catherine to get a good vote as everyone likes her, but it turns out she had the lion's share.
"There are nine Independents supporting the Government, some must have voted for Fergus, which means up to around 15 government TDs could have voted for Catherine. It's extraordinary. This government is a shambles," a source said.
The shock upset comes as the Government had to concede on the makeup of Oireachtas committees yesterday morning.
This is the first time a woman has ever been elected as either ceann comhairle or leas ceann comhairle in the 101 years of Dáil Éireann.