The Minister for Foreign Affairs, Mr Burke, absented himself from yesterday's Cabinet discussion on a new tribunal of inquiry into possible political impropriety.
Mr Burke, who has been at the centre of controversy over a donation made to him by a building firm in 1989, asked to be excused from the discussion.
His spokesman said last night that he did this "to allow members of the Government to have a full and candid discussion of all possible issues involved".
In his absence, the Cabinet agreed in principle to establish a new tribunal of inquiry and decided to consult with the Opposition parties to try to reach agreement on terms of reference for it.
The Cabinet is also understood to have taken the view that a new tribunal should not be asked to consider the controversy about the donation to Mr Burke.
The Government Chief Whip, Mr Seamus Brennan, said yesterday this was under investigation by the gardai, that the Director of Public Prosecutions was involved, and therefore it was not an appropriate matter for a tribunal.
It emerged last night that Mr Burke has begun proceedings against Mr James Gogarty, who has made allegations concerning the donation made to him. The proceedings relate to a recent interview Mr Gogarty gave to the Sunday Business Post in which he contradicted Mr Burke's account of the 1989 meeting at which the donation was made.
The Government gave no indication of what terms of reference it would like the new tribunal to have, and according to Government sources, there is no consensus on how to proceed.
The Taoiseach is said to be anxious to avoid being criticised for leaving any matters out of the tribunal's scope.
Government officials will begin work today on drafting possible terms of reference, while political consultations with the Opposition begin.
The Cabinet will consider the matter again on Tuesday, but terms of reference are not likely to be produced until close to the Dail debate on the McCracken report on September 10th and 11th.
The Government is understood to be considering the possibility of a preliminary inquiry to examine possible subjects that could be inquired into in order to narrow the focus of the new tribunal.
Nevertheless, the Government's wish to have the new tribunal in place quickly was underlined by the decision that the administrative team and facilities supporting the McCracken tribunal will remain in place to serve the new tribunal.
The Fine Gael leader, Mr Bruton, last night accused the Government of being "in a fog" on how to handle the matter.
Mr Bruton said again that the Government should call on Mr Haughey to disclose to the authorities information on donations he may have received from persons other than Mr Dunne, on any other monies he held offshore, and on how he sustained his lifestyle.
The Democratic Left Chief Whip, Mr Pat Rabbitte, suggested that an initial tribunal should investigate the sources of income of Mr Haughey over the years. "It would then be feasible to investigate the detail of certain controversial transactions involving Mr Haughey's governments and those major benefactors."
Otherwise, the list of specific matters being suggested for investigation would continue to grow, he said. "Two such areas not yet intruded into public discussions are passports for sale and the awards of contracts for the IFSC, both of which require scrutiny."
If this approach were adopted, separate consideration would have to be given to other issues of public concern not including Mr Haughey, "such as the financial donations to the Minister for Foreign Affairs, Mr Ray Burke".
He said his party had grave doubts about the effectiveness of a public ethics committee, as proposed by the Government, to deal with these issues.
After yesterday's Cabinet meeting, the Government said it would like the McCracken tribunal to pursue its appeal against the decision of the Grand Court in the Cayman Islands to refuse it access to certain information concerning the "Ansbacher deposits".
The decision, however, is up to the tribunal.
The Government feels that a successful appeal could facilitate any future tribunal, according to sources, by establishing the principle that it can gain access to information on other beneficial owners of money in the Ansbacher deposits, and possibly allowing it to identify other donors to Mr Haughey's Cayman account.