Fianna Fáil would have no problem accepting the support of Sinn Féin TDs in a future government, but would not enter coalition with the party, the Minister for Defence said yesterday.
Mr Smith said that apart from the lack of progress on arms decommissioning, he had major concerns about Sinn Féin involvement in vigilantism.
"Until these two matters are resolved I would not be in favour of entering into a formal agreement with them," he said.
"But when it comes to the position of Taoiseach, all the parties in the Dáil are free to support a candidate, and if Sinn Féin wants to support Bertie Ahern as Taoiseach, I have no problem with that.
"However, the question of entering into an arrangement for formal support in government is a different matter altogether."
Apart from decommissioning, the Minister said, he was concerned about reports of Sinn Féin vigilantism in certain areas.
Mr Smith is the third Cabinet member in recent times to rule out a coalition deal with Sinn Féin after the next election.
The Taoiseach, Mr Ahern, and the Minister for Foreign Affairs, Mr Cowen, have already publicly stated that Sinn Féin must go further on decommissioning before partnership could be contemplated.
Speaking to The Irish Times in Hong Kong where he is officiating at functions on board the naval vessel, the LE Niamh, which is on an overseas trade mission in Asia, Mr Smith predicted that Sinn Féin would win no more than two seats in the next election.
He said there was no mood for a government change among the people.
Mr Smith said the next government would have to look seriously at legislating to provide for the 1992 Supreme Court decision on the X case following the recent narrow defeat in the abortion referendum.
However, he said, the preparation of legislation would prove to be "almost as impossible" as getting a proposal to the people accepted.
While a new government would have to look at legislation for the X case, the Minister said, he would personally have "real difficulties" with going this route.
Mr Smith said the Government was expecting a formal request from the UN in the next few weeks to send Irish troops for peacekeeping duties in Afghanistan. He expected that the request would be for a specialist service such as the Army Ranger wing.
He said the Government would look seriously at the possibility of using the Naval Service in future Irish promotional exercises following the huge success of the LE Niamh's tour of Asia.
The ship left Cobh on February 10th on the State's most ambitious overseas trade promotion ever. The project is being led by Enterprise Ireland as part of the Government's Asia strategy.
More than 200 Irish and local business interests attended an Enterprise Ireland reception on board the LE Niamh in Victoria Harbour last night.