It wasn't just a bad day for the coalition Government: it was a near-disaster. The sound of backbenchers dolefully humming "One day at a time, Sweet Jesus", resonated around Leinster House as they anxiously assessed their prospects of reaching Friday's adjournment of the Dail.

Summer beckoned. But so did the precipice of a Government dissolution. The situation had been bad, but manageable, in the aftermath of last week's Tipperary South by-election that saw a 15-point drop in Fianna Fail support. Delicate footwork over the holiday months and a change in the public's mood on the Hugh O'Flaherty issue could help to restore the political fortunes of Fianna Fail and the Progressive Democrats. But then a fresh barrage of controversy hit the Government.

Kevin Haugh's ruling that Charlie Haughey couldn't get a fair trial in present circumstances lit the touchpaper. The notion of the former Taoiseach walking free from the Central Criminal Court on a charge of obstructing the McCrack en tribunal burned up the opposition parties.

John Bruton was the first to rise in the Dail and demand that Mary Harney should resign because her comments had contributed to the judgment. And, as election fever swept the House in the afternoon, Ruairi Quinn threw caution to the winds and joined in the chorus.

It got worse. By late evening, as news of the Taoiseach being called before the Moriarty tribunal filtered through, Mr Quinn was calling on the entire Government to resign. Not since the days of the Haughey administration had a government been in such disarray, he insisted. It was riven by internal dissent and had lost all honour and credibility. A motion of no confidence was on the way.

Fianna Fail was in dire trouble. From a position where Mary Harney was being pilloried because of the Haugh ruling and for her support for the O'Flaherty nomination, the political focus had suddenly shifted. Allegations by the tribunal lawyers that Fianna Fail - and by inference the Taoiseach - had withheld important information concerning donations to Mr Haughey galvanised the Dail.

Sean Fleming, a former Fianna Fail financial controller, had operated under the belief that all relevant information had been supplied to Mr Justice Moriarty. But it wasn't so. Somebody had decided to withhold "supporting documentation" that had given details of who exactly had been behind a series of "anonymous donations" entered in the Fianna Fail books.

The fact that these were very large amounts of money, had been given by important business people and were treated in a special way, on Mr Haughey's instructions, might have been expected to be of interest to the Moriarty investigation. But no dog barked within Fianna Fail.

The party's legal team will seek to explain this oversight to the tribunal today. In the meantime, Fianna Fail was looking for messengers to shoot. It expressed concern at the way the matter had been reported by the media and insisted the party was committed to co-operating fully with the tribunals.

In that context, it came perilously close to suggesting that the tribunal itself had been at fault. The Taoiseach will have a difficult time when he returns to give evidence. And the Progressive Democrats will be paying close attention.

Mr Ahern's difficulty was Ms Harney's opportunity. From a position where she had been on the receiving end of political clamour involving both her judgment and her comments in relation to Mr Haughey and Mr O'Flaherty, she was suddenly the arbiter of the coalition's future. And it lifted her out of the slough of despond.

Earlier, Liz O'Donnell had tried to switch the agenda by publicly asking Fianna Fail to change the "bad decision" that had been taken to nominate Mr O'Flaherty to the European Investment Bank. The Progressive Democrats were getting out from under. And it looked for a time as if some members of Fianna Fail might follow suit. It was politics at its most brutal. Marion McGennis led a short-lived revolt among Fianna Fail members of the Justice, Equality and Women's Rights committee.

But party discipline prevailed and it was decided not to invite Mr O'Flaherty to come and explain details of his involvement in the Sheedy affair to them.

As Charlie McCreevy had told the Dail, he was still proceeding with the nomination. The Minister for Finance set his jaw and looked his most stubborn. There was to be no overt pressure on Mr O'Flaherty.

Having gone out to defend the nomination to the European Investment Bank with all guns blazing, it was on the cards that the Kildare TD might resign rather than perform a public U-turn under pressure. And any Fianna Fail backbencher who fancies his chances in raising the issue at today's meeting of the parliamentary party can expect a robust response.

The Government's woes continued when it slipped out anti-inflationary measures designed to shore up the Programme for Prosperity and Fairness which were largely aspirational. Big business would be requested not to profiteer; the Director of Consumer Affairs would be asked to monitor prices vigorously; charges by State bodies would be frozen and indirect taxes would be reviewed with a view to the December budget. Finally, there was a proposal to slap a maximum prices order on drink, something the Taoiseach had rejected two weeks ago.

It takes time for a storm to prise the first slate from the roof of a house. But once a gap is made, other slates can fly in short order. It was like that in the Dail yesterday.