A new system of payments to some of the country's top writers, based on how popular their books are with library borrowers, will be recommended in a memorandum being prepared for the Government.
The move follows a round of consultations among Government departments on the introduction of a public lending right (PLR) scheme that is expected to be directly funded by the Exchequer.
The writers who will benefit can already write off all their tax by availing of the Revenue Commissioners' exemption scheme for artists.
The Government is facing legal action by Brussels for failing to introduce a PLR. The European Commission has referred a case against Ireland to the Court of Justice for failing to fully implement a 1992 EU rental and lending right directive. If the Government gives the go-ahead for the scheme, it will be included as part of an Intellectual Property Bill which is due to be brought before the Dáil in the autumn.
"We are preparing a proposal for Government on this as a matter of urgency," a Department of Enterprise spokesman said. "While there is no final decision at the moment, we are not talking about direct on-the-spot charges to borrowers.
"Books being lent through public libraries will be generating revenue for authors but, subject to what the Government may think, we are most likely talking about some Exchequer-based system."
When the 1992 directive was issued, officials interpreted it as allowing Ireland to claim a derogation and to exempt libraries here. But the commission didn't agree.
After a major review of the directive two years ago, the commission found there had been serious delays by some countries in implementing the directive. Ireland was one of the countries singled out for criticism.
The legal situation was clarified in the commission's favour by a recent European Court ruling in an infringement proceedings case taken again Belgium.
Irish authors are already amongst some of the main foreign beneficiaries of a British PLR scheme. They shared a £120,000 payment last year.
The payments are based on a sampling of loans data collected from nearly 1,000 libraries in Britain and Northern Ireland.
Overall, there were almost 18,800 writers who benefited under the British scheme last year - with 80 per cent of the payments exceeding £500. The maximum a writer can get under the British scheme is £6,000.
Writers like Maeve Binchy, Terry Wogan, and Frank McCourt have been reigning as champions in the top 10 loans lists in Britain and the North.
Under an Irish PLR, beneficiaries could also include writers that top library lending lists here like Cecelia Ahern, daughter of the Taoiseach, Sheila O'Flanagan, Patricia Scanlan, William Trevor, Joe O'Connor, Colm Tóibín, Deirdre Purcell, Marian Keyes and Eoin Colfer.
Catherine Cookson had been top of the British league as most borrowed author for 17 years, but last year the new champion of fiction was children's author Jacqueline Wilson.
Harry Potter author JK Rowling was fourth in the overall list and topped the children's chart.
Besides Wilson, four other children's writers made the top 10 of the most borrowed authors list.