The Taoiseach will be asked to decide within a fortnight whether Mr Liam Lawlor TD or any other party member should be expelled from Fianna Fail, or otherwise penalised, arising from the internal party inquiry into payments to Dublin county councillors.
Mr Lawlor yesterday denied that he had received £40,000 as a "contribution" from lobbyist Mr Frank Dunlop in 1991, but acknowledged receiving unspecified sums for consultancy services in the mid-1990s.
Mr Dunlop told the Flood tribunal last month he had paid £40,000 in cash to a "powerful individual", widely believed to be Mr Lawlor, in 1991.
Mr Lawlor acknowledged receiving more than £10,000 from Mr Dunlop in political donations, but did not put a figure on the amount he received for consultancy work which, he said, was conducted "on a normal commercial basis".
His carefully worded denial after a two-hour meeting with the Fianna Fail inquiry team said: "If Frank Dunlop has suggested to the Flood tribunal that I was supposed to have received £40,000 at his office, I state categorically I never received any such contribution from Frank Dunlop."
Mr Lawlor was questioned closely by the five-member Fianna Fail Standards in Public Life Committee concerning money he received from Mr Dunlop and a range of other allegations that have been made concerning him. He is to provide the committee with more documentation today or tomorrow, and may be questioned again.
The committee expects to have a report completed by the end of next week. The report will then be submitted to the Taoiseach, who will decide whether to take disciplinary action.
The chairman of the inquiry, Dr Rory O'Hanlon TD, said yesterday that it had not yet been decided whether the committee would simply report the facts, or make recommendations to the Taoiseach.
A Progressive Democrats spokesman said last night the party "noted" Mr Lawlor's statement, but would not comment further. The party has said that any member of its Fianna Fail coalition partner seen to have been involved in wrongdoing should be expelled from the party, and should resign their Dail seat.
Meanwhile, the Labour Party has said it will not participate in the all-party committee on party funding planned by the Government unless the principle of banning corporate donations is accepted first.
The Government last night won the Dail division to postpone a vote on Labour's Bill to ban corporate donations by 73 votes to 65, with the support of independent deputies and Sinn Fein's Mr Caoimhghin O'Caolain.
The Dail is expected to vote next Tuesday to suspend Mr Denis Foley TD, of Fianna Fail, for 14 sitting days. The Dail Members' Interests Committee was set to recommend the suspension last night as a penalty for Mr Foley's breach of the Ethics in Public Office Act.