Representatives of the financier have reportedly told the Taoiseach he can no longer rely on receiving the money, as the Government now wants private developers to take over the project.
Sports Minister John O'Donoghue said in the Dáil last week there had been no contact with Mr McManus, but hinted he did not expect the donation as it would effectively be subsidising the financier's business rivals. Government sources insisted yesterday that the loss of €63m would not affect plans to build a stadium as private investors would not have expected this money to be forthcoming.
The Department of Sport has received more than 20 expressions of interest regarding the planned construction of a national stadium.
Minister O'Donoghue is to discuss with Cabinet whether to proceed with a formal tendering process over the next few weeks.
Ireland needs the stadium as part of its joint bid with Scotland to host the 2008 European Championships. UEFA will make a decision on who will host the competition next month.
It is widely acknowledged that the controversy over the national stadium has dented both countries' hopes of hosting the championships. There is also doubt over whether it's possible to have a stadium built by 2008. Mr O'Donoghue has said that even if construction were to start immediately, it could take around five years to finish the project.
Mr McManus' donation was contingent on the original 80,000-seat "Bertie Bowl" rather than the 65,000-seat "enhanced" arena for which expressions of interest were sought.
The decision to seek private investors in the construction of the stadium followed a Government decision earlier this year that no public money would be put towards the scheme.
The Government has, however, agreed to donate the land in Abbotstown to the development as a sweetener and it is expected that taxpayers would also have to fork out on the construction of road or rail links to the arena. The cost of the Abbotstown fiasco has already been substantial as it cost millions of euro to transfer the national laboratories from the site, in preparation for a stadium.
Mr O'Donoghue has insisted, however, that private investors will not be in a position to "make a killing" at the expense of taxpayers.
There was widespread scepticism at plans to seek private investors when the plan was originally announced, but the depth of interest in the bid is seen by many as a positive sign that a privately-funded stadium would be a viable prospect.