A minority government based on a binding agreement between Fine Gael and Fianna Fáil is emerging as the only realistic option following the failure of the Dáil to elect a taoiseach on Thursday.

With Fianna Fáil still firmly against any form of coalition, there is a growing consensus among TDs of the two big parties that the country is headed for minority government led by one of them – or, if not that, a second election.

Fine Gael TDs accepted on Thursday night that their preferred option of a coalition deal with Fianna Fáil is not a runner. But they are wary of being held hostage in a minority government.

A number of Fine Gael Ministers said that their party would seek certain binding assurances from Fianna Fáil if the two parties were to enter into a minority government.

Lost votes

Fianna Fáil sources said they are open to supporting a minority government in a situation were “votes can be lost except on a budget or vote of confidence before a government could fall”.

“That’s a huge shift in how the Dáil works and make it more bearable for a minority government,” the source said, adding that such a reform would also apply if Fianna Fáil were leading a minority government.

The source said it would effectively be a halfway house between a minority government, as has previously been known, and a full-blown coalition.

Meanwhile, acting Taoiseach Enda Kenny is not expected to make contact with Fianna Fáil leader Micheál Martin in the short term, but will first talk again talk to Independents and smaller parties.

Minister for Transport Paschal Donohoe said the "most important priority" for Fine Gael is to "intensify our discussions and negotiations with Independents and smaller parties".

“We will look at all options in relation to this,” he said. “But any option has to be something that will work, has the ability to put in place good policies for the country, and that is capable of governing.

“We will see if it is possible to put together a government that has the ability to get polices implemented and passed.”

Sources in Fine Gael on Thursday said a hardening of the Fianna Fáil mood against coalition made a second election this year more likely. They expressed concern that a minority government could fall over the next budget.

Guarantee

Outlining Fine Gael’s demands, a senior Minister said: “You can’t have a minority government without having some sort of guarantee. At least you’d need two years.”

Another Minister said “it wouldn’t be a real government with a five-year mandate to get things done. You’d be operating on the basis that you could have an election in five weeks or five months. How could we be sure they wouldn’t break it?”

There is a desire in Fine Gael that, with just 50 seats, they would have to include smaller parties such as the Green or Social Democrats in a minority if it was to have any credibility.

Some leading members of Fianna Fáil still believe they can form the nucleus of a minority government with the support of groups such as the Independent Alliance.

However, the fact that Mr Martin received 14 less votes for taoiseach than Mr Kenny demonstrates how difficult it will be for the party to win enough support for that option.