A ban on corporate funding of political parties would be unconstitutional, the Taoiseach claimed.

Mr Ahern said that Labour was refusing to participate in an all-party committee on funding. "The decision it wants me to give in advance is that I accept the principle that corporate funding should be banned. I do not accept it. It would be against the Constitution."

The Labour deputy leader, Mr Brendan Howlin, rejected the Taoiseach's assertion, while his party colleague, Mr Emmet Stagg (Kildare North) described it as "rubbish".

Mr Ahern replied: "As leader of a political party, I stand by the Constitution. I will not change my position on the matter."

Mr John Gormley (Green Party, Dublin South East) said that the Constitution should be changed.

Mr Howlin said that while Labour awaited the Taoiseach's response to a letter from the party leader, Mr Ruairi Quinn, to enable it to get involved with enthusiasm in the work of the allparty committee, it needed the principles established first. It was surprising, he added, that the Taoiseach had chosen to respond to the correspondence on the Order of Business rather than in writing.

"He stands by the contributions that his party is receiving - not the Constitution. It is time to break the link. There is no point in entering a talking shop."

Mr Ahern said he was not referring to correspondence between Mr Quinn and himself. He was referring to issues raised by Mr Quinn during a recent private members' debate, and Mr Quinn and himself continued to correspond on those issues. "There are Bills from the Labour Party, the Government and Fine Gael. If we are serious about dealing with the issues on an all-party basis, we could do so."

He added that he would make another attempt to try to get Labour to come on board. "We all have a role to play if we are serious about good legislation. If we just want to set preconditions not to enter things, then that is all right."

The Fine Gael leader, Mr John Bruton, who first raised the matter, wondered what plans the Government had for legislation dealing with corruption, whistleblowers, lobbyists and related matters. Mr Ahern said that in the absence of an all-party committee, the Government would have to proceed with its own legislation. Asked by Mr Bruton about a time-scale, the Taoiseach said that the Standards in Public Office Bill would be published during the current Dail session, while the corruption legislation was ongoing, as was the Electoral (Amendment) Bill, although it would be the autumn before they were published.

Pressed further, Mr Ahern insisted there were constitutional imperatives, relating to the banning of corporate donations, and he had been advised that they could not be ignored. Mr Howlin said he was a minister who dealt with the issue in 1997, and there were no constitutional difficulties. Asked by Mr Ahern why he did nothing about corporate donations when he introduced the legislation, Mr Howlin replied: "We did. We limited them and required disclosure."