The Minister for Finance has agreed to become Ireland's next EU Commissioner, paving the way for a major Cabinet reshuffle in the autumn and an attempt to redefine the Government before the next election.
Mr McCreevy announced his acceptance of the post last night, dramatically reversing his recent insistence that he did not want it. He said the Taoiseach had offered him the job yesterday week, and denied reports he had been put under pressure by Mr Ahern to take the job.
While some in Fianna Fáil have been pressing for Mr McCreevy's removal from Finance to shed the "right-wing" tag that has been attached to the party, the Minister insisted the decision had not arisen from such pressure.
He said that had he turned down the position he might have remained Minister for Finance for the next few years. The Minister for Foreign Affairs, Mr Cowen, is now seen as the most likely successor to Mr McCreevy when the Taoiseach announces a Cabinet reshuffle, most likely in late September.
With three or more new Cabinet members probably to be appointed and most Ministers likely to shift their portfolios, this will be the most radical reshuffle of his front bench or Cabinet since Mr Ahern became party leader a decade ago.
There is considerable Government hope that Mr McCreevy may receive a significant economic portfolio from the incoming European Commission president, Mr José Manuel Durao Barroso.
The Taoiseach meets the former Portuguese prime minister tomorrow, and Mr McCreevy said last night his portfolio was a matter for discussion between Mr Ahern and Mr Barroso.
Mr McCreevy also said an economic portfolio was "not necessarily" what he wanted, adding to the belief that the Taoiseach is not yet certain what job is available to the Irish nominee. "I have experience in a wide variety of areas. I come from a class of people who believe no matter what you do, you do your best."
Mr McCreevy said he had discussed the job "in a general way" with the Taoiseach last year. Since then "I have oscillated as to whether I would or wouldn't" accept the post.
But he could not have given any public indication he was considering it, because "if a Minister gives any indication he is thinking about moving" it causes instability. Just three weeks ago Mr McCreevy told The Irish Times: "I think my best role is in Irish politics, I've enjoyed being Minister for Finance." Asked last night why he had changed his mind, he quoted the late British prime minister Harold Macmillan: "Events, dear boy, events." He added that his decision had been influenced by "a number of factors".
At the age of 54 and after 27 years in the Dáil, he had been "trying to think for some time: When does one go? You never know when the best time is to go. You always want to go one more time."
He declined to respond to recent reports that some within Fianna Fáil said his approach as Minister for Finance had contributed to the party's poor showing in the recent local government and European elections. "There is no point in going into that. When time moves on I will be prepared to let the record stand."
Mr McCreevy joins a Commission led by Mr Barroso, a man who also has a strong neo-liberal economic outlook. He acknowledged that many of the 10 new EU members looked to the Irish economic model as "the way to go" in many ways.
Reflecting the possibility that Mr McCreevy's appointment may be politically significant in European terms, the Tánaiste, Ms Harney, said last night Europe "badly needs someone with his economic perspective, and I anticipate he will have a forceful role to play".
She said he had been "an excellent Minister for Finance and has played a key role in helping bring about Ireland's economic recovery".