The European Commission is expected to drop infringement proceedings against the Republic over the €63.49 million (£50 million) super-trawler, the Atlantic Dawn, following an agreement allowing it to fish in international waters.

The Department of the Marine and Natural Resources confirmed that the Commission intended to allow the Republic an additional 14,055 tonnes capacity in the pelagic (mackerel/herring) fleet - which matches the tonnage of the Atlantic Dawn on the Lloyds' register.

However, a spokeswoman for the Commissioner for Agriculture and Fisheries, Mr Franz Fischler, said the issue of registering the vessel had not been resolved.

Commissioner Fischler's spokeswoman told The Irish Times "progress had been made" on a second issue which was also the subject of infringement proceedings - the size of the Republic's mackerel/herring fleet. Six pelagic vessels are on temporary licences, until the issue of excess capacity in the fleet can be resolved.

Sources at the Department said the deal was "complex", but could involve a commitment to ensure that the super-trawler Veronica, also built by Mr McHugh, would fish outside the EU in international waters.

The breakthrough on the Atlantic Dawn is significant for its owner, Mr Kevin McHugh.