Small firms lobby group ISME, riven by internal differences, will hold a meeting of its national council today. The meeting will hear a report from a finance subcommittee on alleged inappropriate financial procedures earlier this year.

Sharp differences have emerged between the organisation's chief executive Mr Frank Mulcahy and some of its eight-member executive council. The differences centre on a number of issues including a cheque for £26,000, signed by Mr Mulcahy and used as a deposit on a house he bought, and the overall running of the organisation.

It is understood that Mr Mulcahy has maintained that he was due these monies. The finance committee is expected to report that it did not find evidence of financial irregularity within the organisation but some procedures were "rather loose".

The meeting today could be attended by up to 40 members of the national council. They may also hear details of a separate investigation carried out by members of the executive council, some of whom are directors of the limited company which runs ISME.

The differences have emerged in the media in recent weeks and have been portrayed partly as a battle between Mr Eoghan Hynes, a director and founding member of ISME and Mr Mulcahy. It is thought that if directors of ISME are not satisfied with the findings of the finance committee, they may consider taking other steps. It has been argued that if the directors are dissatisfied, they may have to consider resigning as they may feel the ultimate responsibility for financial procedures lies with them.

One source said he was hopeful that the row could be resolved at today's meeting. It would involve restructuring the organisation and a change of roles for Mr Mulcahy and others.

The row has intensified in recent weeks and there have been reports of stenographers taking notes at some of the meetings involving Mr Mulcahy and the executive council and of solicitors and accountants also being present to represent the various factions.

Many members are dismayed at the way the row has unfolded, saying it is inflicting serious damage on the organisation. Some have claimed that memberships have not been renewed as uncertainty over the future of the organisation continues.

The infighting began earlier this year when Mr Peter Faulkner, managing director of Faulkner Packaging, took over as chairman. He resigned in August following protracted differences with Mr Mulcahy. He said he was stepping down because it would not be possible to rebuild the relationship between himself and Mr Mulcahy.

The post was then taken over by Mr Seamus Butler, a Longford businessman.

ISME was set up five years ago, following an acrimonious split from IBEC, the employers' organisation.