Minister for Justice Alan Shatter sacked former Garda confidential recipient Oliver Connolly because he could not "unequivocally repudiate" an alleged conversation he had with a whistleblower.
Separately, Mr Shatter has initiated a review of all correspondence between his department and Garda whistleblower Sgt Maurice McCabe.
He said there would be a particular focus on the allegations by Fianna Fáil leader Micheál Martin that cases of "abduction, assault and ultimately murder" have not been properly investigated.
Sources said Mr Shatter initiated the review himself.
In a statement last night Mr Shatter said Mr Connolly undermined the office of confidential recipient, a whistleblower liaison post, if the conversation with Sgt McCabe had taken place “as reported”.
Extracts from a taped conversation between Mr Connolly and Sgt McCabe were read into the Dáil record recently by Mr Martin and Independent TD Mick Wallace.
'Print media'
One of the extracts said: "If stuff was to get out into the public, the print media, I tell you something Maurice – and this is just personal advice to you – if Shatter thinks you're screwing him, you are finished."
Mr Shatter relieved Mr Connolly of his duties this week.
In his statement last night Mr Shatter said “rumours were circulating for some time regarding the existence of an alleged tape and transcript”.
He said he could not, as Minister for Justice, ask for a tape or even a transcript. “However, following an alleged extract from the alleged tape being placed on the Dáil record, I asked my department two weeks ago to contact Mr Connolly outlining my concerns that, if the conversation as reported had taken place, then his actions had undermined the office of the confidential recipient.
“Contacts with Mr Connolly over the following two weeks did not satisfy me as to his response to the controversy.
"I informed him that in the context of his failure to unequivocally repudiate the content of the alleged conversation or take the necessary action to restore public confidence in the office of confidential recipient, I believed his position was untenable and I had no alternative but to relieve him of the position."
'Something was coming'
Labour Party sources last night said they were aware that "something was coming" regarding Mr Connolly.
Taoiseach Enda Kenny yesterday described the allegations made by Mr Martin in the Dáil as "grave" and said they would have to be dealt with.
'Playing politics'
Mr Martin passed the information given to him by Sgt McCabe to Mr Kenny, and the Taoiseach said he had "no intention of playing politics with an issue as serious as this".
Mr Kenny said Mr Martin was right to have done so, and said the documents contain “extremely serious allegations”.
Tánaiste Eamon Gilmore, speaking in Brussels, said "very serious allegations have been made". He asked anyone with more information to come forward.