Fine Gael and Fianna Fáil are expected to agree an electoral deal over the filling of two vacant Seanad seats.
“It makes sense, given the confidence-and-supply agreement between the two parties” said a Fianna Fáil source.
Byelections to fill the vacancies, caused by the resignations of Labour's Denis Landy on health grounds, and Independent Trevor Ó Clochartaigh, formerly Sinn Féin, to take up a post as communications manager with TG4, will be held before the summer.
The electorate for the byelections are TDs and Senators, although those wishing to replace Mr Landy will have to secure an outside nomination from a registered body, given that was the route chosen by him in the 2016 Seanad election.
Mr Ó Clochartaigh was nominated by Sinn Féin in 2016, but left the party last year amid an internal row in his Galway West constituency.
Labour and Sinn Féin will be unable to retain the seats unless they manage to do a deal to secure the numbers with other parties and Independents. This is unlikely.
This paves the way for a deal between the two largest parties, possibly also involving Independents supporting the minority Government.
Taoiseach Leo Varadkar has already approached a former president of the Ulster Farmers' Union and strong anti-Brexit campaigner, Ian Marshall, to run for the seat left vacant by Mr Ó Clochartaigh.
Mr Marshall works in Queen’s University Belfast in the Institute for Global Food Security.
Fine Gael and Fianna Fáil councillors, some with Dáil ambitions, have been lobbying their respective party headquarters for a nomination to contest the byelections.
Fine Gael sources say it is now accepted that Mr Marshall will secure a party nomination, given the approach was made by Mr Varadkar, and there could be a trade-off with Fianna Fáil for the other seat to secure sufficient support to get him elected.
