The Minister for Public Enterprise, Ms O'Rourke, has told the rail signalling inquiry she was misled in her belief that a multi-million pound deal between Esat and CI╔ had been approved by consultants.
Ms O'Rourke said she regarded a favourable assessment by consulting firm, Norcontel, as the coup de grace in the venture.
"It was represented to me that they (Norcontel) had kept a watching brief, that they had looked at it (the deal) in all aspects and that the final deal was endorsed as a very good one for CI╔," she said. This was the "icing on the cake".
The inquiry has already heard evidence from Norcontel that the firm gave no such endorsement and, while involved in advising CI╔ on the general issue of entering a telecommunications venture, was not asked to evaluate the final agreement.
Questions have been raised throughout the inquiry about the impact of the venture on CI╔'s plans to install a new signalling system, known as mini-CTC, which was needed to improve safety and efficiency on the railway lines.
The deal allowed the telecommunications company to create a valuable national landline phone network by laying fibre optic cables along the railway lines.
Evidence has been given that the installation of the Esat cables got priority over the laying of CI╔'s signalling cables, contributing to delays and cost overruns in the project which is still incomplete, two years overdue and about £36 million over-budget.
Norcontel's apparent endorsement of the Esat-CI╔ deal was relayed to the Minister in February 1998, almost 10 months after the deal was struck, during a meeting she held with CI╔ representatives to discuss the need for a statutory instrument to give CI╔ legal clearance to enter the commercial telecommunications market.
The CI╔ representatives were former head of programmes and projects, Dr Ray Byrne, and property manager, Mr James Gahan.
The deal, struck in May 1997, was signed just before Ms O'Rourke took up her position as Minister. With hindsight, it seemed to have been finalised with "unseemly haste", she said.
Ms O'Rourke said she had no inkling that the mini-CTC project was running into difficulties until the last Saturday in October 1999 when she received an anonymous call to her constituency office.
Within a day or two she received a formal memo from a Department official.
Ms O'Rourke was awaiting a consultants' report on the problems and future of the project when then chairman of CI╔, Mr Brian Joyce, resigned suddenly in March 2000.
The Minister described Mr Joyce's resignation as the "biggest shock of her political career".