The European Investment Bank (EIB) is expected to formally tell the Government next week that there is insufficient support to proceed with the nomination of the former Supreme Court Judge, Mr Hugh O'Flaherty, as vice-president of the bank.
After three months of controversy over the proposed nomination, the president of the bank, Mr Philipe Maystadt, is set to inform the Minister for Finance, Mr McCreevy, that the nomination of Mr O'Flaherty to the u £147,000-a-year post cannot be ratified due to a lack of votes.
The Irish Times has learned that senior bank staff are angry and concerned at the row that has erupted over the nomination and the negative publicity it has brought on the bank. Only a dramatic turnaround in support in the next few days will change Mr O'Flaherty's fortunes.
The matter will be discussed at a regular two-day meeting of the bank's management committee, chaired by Mr Maystadt, on Tuesday and Wednesday. The Government is likely to be told after this meeting that there is insufficient support for Mr O'Flaherty.
The Irish Times has also learned that Mr Maystadt met Mr O'Flaherty in Europe to discuss the nomination over a month ago. A Department of Finance spokesman said last night that while they were aware that the meeting took place, it was not "initiated or arranged" by the Department.
Asked about the fact that the EIB was on the verge of telling the Government there would be insufficient support for Mr O'Flaherty the spokesman said: "That is a matter for the EIB."
It was unclear last night whether, in the event of the Government being told there was not enough support for the current Irish candidate, it would then put forward a new nominee or if it would forgo the position, which is rotated with Denmark and Greece.
The Irish Times has established that the head of the National Treasury Management Agency, Dr Michael Somers, was sounded out about the EIB position before Mr O'Flaherty was considered.
A senior bank source said last night: "We consider at this stage that it is not in the bank's interests to have this situation continuing. We have to reach a decision one way or another."
A bank spokesman confirmed that by close of business yesterday there were still not sufficient votes from the bank's 25 directors to ratify the O'Flaherty nomination. A simple majority of 13 of the 25 votes in favour is technically required.
The initial deadline for receipt of votes was last Friday, August 18th, but the bank said as it was a "soft" deadline it would accept late votes.
The nomination cannot be put to the bank's governors, the EU finance ministers, until it is ratified by the directors.
The failure to secure support for Mr O'Flaherty would be a major embarrassment for Mr McCreevy and the Government which, despite resistance from within Fianna Fail and the Progressive Democrats, insisted on proceeding with the nomination.
Mr O'Flaherty resigned from the Supreme Court in 1999 when the Government threatened to impeach him over his role in the Philip Sheedy affair.
The proposal to nominate Mr O'Flaherty to the job, announced on May 19th, has caused significant damage to the Government parties. Before the Dail recess, Fianna Fail backbenchers were reassured by senior party members that the nomination would have a smooth passage in Europe.
The Belgian representative to the EIB, Mr Jean-Pierre Arnoldi, admitted yesterday that the nomination was "problematic".
When asked by The Irish Times if he thought it would be helpful if the 25 directors met Mr O'Flaherty to discuss the nomination he replied: "I think Mr Maystadt has met with Mr O'Flaherty."
Mr Arnoldi said he had not yet voted on the proposal but was waiting to discuss the matter with the Minister for Finance, who was just back from holiday.