The Taoiseach has abandoned his plan to establish an all-party committee on political funding, following the Labour Party's decision not to co-operate with the proposal.
Reform of the funding system will now take place through legislation. One such piece of legislation, the Standards in Public Office Bill, is expected to be published in the next month.
Mr Ahern had hoped to introduce reform by consensus, but the Labour Party leader, Mr Ruairi Quinn, confirmed yesterday that the party would not be participating in the all-party committee due to Mr Ahern's refusal to commit himself to a ban on corporate funding of political parties.
Mr Quinn said he would not be taking part in an exercise to achieve consensus where none seemed possible. "To do so would serve only to delay and postpone necessary action to restore public confidence in the political system," he said.
Mr Quinn published letters on the matter between himself and Mr Ahern. In a letter of June 2nd, Mr Ahern said of the proposal to ban corporate funding: "Given the constitutional and political complexities surrounding the issues of political funding, it would be irresponsible of me, as Taoiseach, to accept blanket preconditions to any discussions."
Mr Ahern said that, while he was fully aware of the short-term political attractions of such a proposition, he had to seek a solution that was both constitutionally sustainable and good for politics in the long term.
He said the legal framework for the conduct of Irish politics had changed radically since the events now being revealed in the tribunals took place. He referred to the Ethics in Government Act and the Local Government (Donations and Expenditure) Act.
Mr Ahern also said in the letter it was far from clear that the taxpayer was persuaded of the wisdom of being required to fund all activities of political parties. "Neither am I," the letter stated. "Political parties are voluntary organisations and, as such, are entitled to fund-raise, albeit in a fully transparent and effectively regulated manner."
Mr Ahern said he would have fundamental democratic reservations about bringing into existence what would in effect be State-run parties.
He also said there was a strong case for capping donations. "A complete ban on all corporate donations, however, would mean that political parties would be severely disadvantaged against powerful vested interests and single-issue groups as well as media organisations."