The former Taoiseach Mr Albert Reynolds last night said he did not reappoint Mr Ray Burke to the cabinet because of "continuous and persistent rumours" that the outgoing minister for communications was involved in planning corruption.
Mr Reynolds said he was "surprised" the current Taoiseach later gave Mr Burke the foreign affairs portfolio because he had voiced his suspicions when Mr Ahern succeeded him as party leader.
His decision to overlook Mr Burke after the 1992 general election was based on rumours rather than firm evidence that the north Dublin TD was receiving kickbacks from prominent builders, Mr Reynolds said.
But the move, at the time regarded as an act of revenge motivated by Mr Burke's loyalty to previous Taoiseach Mr Charles Haughey, had been vindicated by the Flood Tribunal's findings that Mr Burke received a number of corrupt payments.
Mr Reynolds said: "It was continuous and persistent rumours of corruption in the planning process. There were many media articles at the same time. It was an issue on which I had to make a call.
"You have to make a choice. I made my choice. It took some time to prove me correct.
"The former Taoiseach said he did his utmost to substantiate allegations that Mr Burke's was actively soliciting illicit bungs from property developers.
He instructed the then minister for the environment, Mr Michael Smith, to investigate the rumours. But despite Garda assistance, Mr Smith was unable to uncover any hard evidence linking Mr Burke to corrupt payments.
Speaking on RTÉ's Six One programme, Mr Reynolds said Mr Kennedy had concluded that planning law in Co Dublin had become "a debased currency".
Denying he had not done enough to pursue the matter, the former Taoiseach said more pressing issues such as the X-case controversy had distracted him.
"We had a lot of diversions in relation to it. I'm sorry I didn't go the rest of the way.
I'm glad it has come out. In this country we were always very proud that nobody could point a finger of suspicions of corruption at the politician system or at the public service."
Earlier this week, a former adviser to Mr Reynolds revealed he had threatened to resign as a government communications strategist if Mr Reynolds appointed Mr Burke to the cabinet.
The incident occurred when Mr Reynolds had asked for Mr Tom Savage's opinion of a number of names of potential ministers.
Mr Savage said he was aware of an "unofficial system" of bribery at Dublin County Council.