Mr Ray Burke, as minister for communications in 1989, told the secretary general of his Department to arrange to cap advertising at RTE, the tribunal was told yesterday.
Mr Bernard McDonagh, then Department secretary general, now retired, said he remembered being at the meeting in December 1989 with the then minister and two Century directors, Mr Oliver Barry and Mr James Stafford.
He recalled Mr Stafford saying there were complaints from Century of unfair competition and treatment by RTE and effectively that RTE was sabotaging the development of Century.
"I was instructed by the minister to make arrangements as necessary to provide capping of advertising of RTE," Mr McDonagh said.
He suspected there had been some doubt expressed about the minister's powers under the law to interfere with the capping of RTE's advertising. He was not sure at the time and decided that the Attorney General would have to be consulted.
Ms Patricia Dillon SC, for the tribunal, asked if this was the catalyst for the legislation which followed.
Mr McDonagh said that obviously getting advice from the AG on powers was a catalyst, although legislation could change by the time it was actually passed.
As far as he could remember Mr Burke had indicated at the meeting that he wished to cap RTE - but the major question was whether he had the power. The Department's view was that he did not and this was effectively confirmed by the AG's office.
Ms Dillon said an aide memoire prepared by Department officials in 1990 was sent to government - and in March the government decided to bring in the legislation on capping.
She said the parliamentary drafting office returned the official draft of the Broadcasting Bill in May 1990, and it contained two new provisions; that the minister could, up to 25 per cent, divert licence fees to the IRTC, and that the authority could disperse it to the independent radio sector.
Ms Dillon said: "This was a radical departure from the legislation brought to government?"
Mr McDonagh replied: "It was, yes." Asked if he knew how this arose, he said he did not. "As to where it came out of, I don't know."
He said there were two possibilities. The first could be that it was from the Department and the second was that it could have been routed through the AG's office following discussion at cabinet.
Mr McDonagh said the suggestion had not emanated from the Department. He had not found any papers to that effect.
Ms Dillon said the provisions in the end did not go through as there was a great deal of opposition to them.
Mr McDonagh said it became obvious in 1991 that the legislation, including capping, was not achieving the objectives intended and was causing serious problems to RTE and the advertising industry and it was repealed.