The Taoiseach gave a cautious response to a demand by the Fine Gael leader, Mr John Bruton, for a Dail debate on the opening up of competition for the delivery of social welfare payments, currently administered from post offices.

Mr Ahern said: "This Government is always anxious to debate anything connected to the protection and livelihood of rural Ireland."

The Labour leader, Mr Ruairi Quinn, asked: "If, as reports indicated, the Government has referred this matter to the Attorney General for a legal interpretation, and assuming he is not driven by some form of market madness which suggests that a rural post office is a financial and not a social service, will legislation be necessary to put such a contract out for public tender?"

Mr Ahern replied that "the Attorney General is examining the EU directive relating to this area. We must examine what happened and the legal advice which was obtained on this matter at that time".

Mr Quinn said: "Do I take it the future of the rural post office system will depend on a legal interpretation of whether it is a financial or a social service and the rest of us are powerless?"

Mr Ahern replied: "Previously, the issue was kicked to touch in a clumsy way. The deputy can take it that it will be properly dealt with this time."