The Government appears set to stand by the Minister for Finance, Mr McCreevy, in the wake of the O'Flaherty controversy, with Government sources saying they do not believe a Cabinet reshuffle will take place.
The Taoiseach and Mr McCreevy are expected to discuss an alternative nominee as European Investment Bank vice-president today or tomorrow, following Mr Hugh O'Flaherty's decision a week ago to withdraw.
While Mr McCreevy told reporters last Friday he had not ruled out nominating a politician, the nominee is expected to be a civil servant, with Mr Michael Tutty, the Second Secretary in the Department of Finance, seen as the front runner.
Mr Ahern, whose sole prerogative it is to reshuffle his Ministers, has yet to make any public comment on the affair since the mounting opposition among EIB directors and senior executives ended with Mr O'Flaherty's withdrawal.
However, Mr Ahern is notoriously cautious about Cabinet changes. While a number of senior figures and many backbenchers hold Mr McCreevy primarily responsible for the political damage caused by the saga, Government sources do not believe Mr Ahern is considering moving him. .
The Minister for Foreign Affairs, Mr Cowen, yesterday insisted Mr McCreevy has "all his colleagues' fullest confidence". The O'Flaherty issue was resolved, he said, and the Government must now be allowed to get on with running the country.
Mr Ahern is this week expected to make his first public comment on the matter since Mr O'Flaherty's withdrawal.
He will travel to New York tomorrow to attend the UN Millennium Summit which begins on Wednesday. Government sources say Mr McCreevy is likely to put a name to Wednesday's Cabinet meeting after discussing it with Mr Ahern.
Government sources yesterday said they did not believe a Cabinet reshuffle would take place and that talk of a reshuffle was "pure speculation".
Mr Cowen expressed "full confidence" in the Minister for Finance, Mr McCreevy, but said he would not comment on speculation about a reshuffle.
"He should not resign," said Mr Cowen in relation to Mr McCreevy. "It is not an issue. Charlie McCreevy has our fullest confidence" and was doing an "outstanding job, as the 10 per cent growth in the economy last year shows".
Speaking to journalists on the fringes of the EU Foreign Ministers' meeting in Evian, he attacked the Opposition for "seeking to reduce the Government agenda to one item". The Government's record should be seen as a whole, he said.
The Government had decided to make the O'Flaherty nomination, he said. And the Government would now agree on an alternative name. He said he was unwilling to engage in a war of words over calls by "anonymous" backbenchers for Mr McCreevy's resignation.
Meanwhile, the Labour Party leader, Mr Ruairi Quinn, has said the Government should retain the right to nominate individuals to senior positions, such as chairpersons of semi-state bodies. However, these nominations should be vetted by an Oireachtas committee, he said on RTE Radio 1.
"That would give an accountable mechanism in public to the representatives of the public while still giving to the Government of the day the right of initiative," he said.