The Minister for Finance has told the Ceann Comhairle, Dr O'Hanlon, that his Department cannot provide money to indemnify a legal action by two politicians against the Morris tribunal.
The development follows the Government's refusal to directly indemnify the action by the Labour TD, Mr Brendan Howlin, and Senator Jim Higgins of Fine Gael, who argue that they are obliged not to disclose who made allegations to them about corruption by some gardaí in Co Donegal.
The allegations, which the politicians relayed to the Government in 2000, were instrumental in the establishment of the tribunal.
Mr McCreevy is understood to have written to Dr O'Hanlon informing him that he cannot indemnify the defence of the action by the two politicians, which was initiated last month.
This was in line with legal advice received by Mr McCreevy and the Minister for Justice, Mr McDowell, but contrary to earlier signals from the Government.
The advice is understood to argue against the Government providing support for an action which could undermine a tribunal which it set up.
The politicians are challenging a direction by the tribunal chairman, Mr Justice Morris, to disclose the source of allegations which he is investigating.
The politicians have said they acted appropriately at all times and argue that they are entitled under the Constitution to maintain private records. Their action will centre on their right to privilege.
In theory, the Attorney General, Mr Rory Brady, could cancel legal fees incurred during the case by declaring the case was in the public interest because it raised constitutional questions. However, this falls short of indemnity.
