Ahern expected to seek Callely resignation tomorrow

Junior minister Ivor Callely is expected to resign or be sacked tomorrow morning after another controversy today surrounded the Fianna Fail TD.

I did not do anything wrong. If I resign am I to go down as having done something wrong? Ivor Callely

Speaking on RTÉ Newstonight Mr Ahern said he had held a long conversation with Mr Callely. "He knows my position. I know he wanted to talk to his family tonight. I will deal with it in the morning. I have made very clear . . . . Ivor knows what I'll do."

If Mr Callely does not resign beforehand it is expected a Cabinet meeting will  see Mr Callely lose his portfolio as junior minister for transport.

Earlier today Mr Callely told ireland.comhe was angry about the "unsubstantiated innuendo that he was involved in the favouring of any public contract" after one of the largest building firms in the State arranged for the painting of the Minister's house.

The same company, John Paul Construction, was refurbishing the Dublin office of the Eastern Health Board, of which Mr Callely was the then chairman.

Mr Callely has denied any wrongdoing over the awarding of the health board contract.

Asked if he would be stepping down after calls by Opposition parties this morning, Mr Callely said: "I did not do anything wrong. If I resign, am I to go down as having done something wrong?"

"I find the whole episode sinister in the extreme. I am particularly angry about the unsubstantiated innuendo that as a member of the Eastern Health Board I might have in any way favoured John Paul Construction in a public tender process," Mr Callely said.

"The tendering process is beyond reproach and to suggest that one member of a 38 member board could influence any such contract is not credible. Indeed the initial contract was awarded before my time as Chair."

Mr Callely said John Paul Senior, a friend, had helped him out after his painters let him down at short notice. He said he had expected a bill at the time and had written to the company now seeking to settle the matter.

Speaking after meeting the Taoiseach, Mr Callely said: "We had an open and frank discussion. I put my position and he listened, he put his position and I listened. We have taken some time out now. I did indicate that I would come back to him tomorrow."

Earlier, speaking in the Dail, Mr Ahern made it clear he was not impressed with Mr Callely. He said: "[Mr Callely] has worked hard in his job but he is surrounded in a number of controversies.

"I have a sense of fair play to listen to the deputy but I am not impressed". Mr Ahern said the latest claims were "serious issues".

Fine Gael leader Enda Kenny said the situation caused "very serious and grave doubts among the public about the capacity of this minister to carry on." Labour leader Pat Rabbitte asked the Taoiseach: "Are you going act now today or are you going to drag it out until you see which way the wind is blowing and ultimately he ends up retiring."

In a statement on the controversy John Paul Construction said it "did not receive any payment or other benefit" after it arranged for a painting subcontractor to redecorate the interior of the Minister's Clontarf house. However, it confirmed that it footed the bill for the work carried out on the Fianna Fáil TD's residence.

The company said: "In response to media queries, John Paul Construction can confirm that in the early 1990s it engaged a painting contractor to undertake work on the private residence of Mr Ivor Callely."

The statement said the work was undertaken by a painting sub-contractor, Philip Lambert, who regularly did work for them. The work was billed to and paid for by John Paul Construction, the statement said.

It added: "John Paul Construction did not receive any payment or other benefit from any party in relation to this work." It also said the company was undertaking a review of its records and will consult "insofar as it is possible to do so" with personnel of the time. It will not issue any further comment until the review is complete.

Mr Callely has been under intense pressure since the controversy surrounding resignations of civil servants from his office and an offer by the junior minister of a car to a political staff member to stop him stepping down.