The Government has moved swiftly to try to maintain confidence in Telecom's flotation process following the surprise resignation of the company's deputy chairman, Mr Ron Bolger - the second board departure in as many days.
The Government appointed former Bank of Ireland group chief executive Mr Pat Molloy to replace Mr Bolger, while insisting that the flotation was still on track. It is also expected shortly to appoint a leading US telecoms figure to the board.
Mr Brian Thompson, who resigned as chairman on Monday, is taking up a post as chairman and chief executive of GTS, a global telecoms company.
Opposition parties strongly criticised the Minister for Public Enterprise, Ms O'Rourke, over her handling of the events and her appointment of Mr Ray MacSharry, a former EU commissioner, as chairman.
Fine Gael called on the Government carefully to consider postponing the flotation, which is expected to raise £2 billion and is due to take place in June.
It is understood that Mr Bolger was extremely upset that having stepped aside as chairman to make way for Mr Thompson's appointment, he was passed over again. Mr Thompson was appointed in January because it was felt the company needed a figure with strong international telecoms experience in the run-up to the flotation.
Mr Thompson resigned because of a possible conflict of interest. However, it is understood that Mr Bolger was not consulted and Ms O'Rourke appointed Mr MacSharry, who has no background in telecommunications.
Sources said last night that Mr Bolger had accepted the deputy chairmanship "with some difficulty" in January, but "could not swallow being passed over" second time around.
It is believed Mr Bolger delivered a one-line letter to Ms O'Rourke yesterday evening and a copy to Mr MacSharry. It said he was tendering his resignation, but gave no reasons.
Fine Gael's Finance spokesman, Mr Michael Noonan, said he believed deferring the flotation would not only serve the national interest, but the interest of Telecom workers.
In a statement highly critical of Ms O'Rourke, for making "a hames of the flotation", Mr Noonan said it was very ironic that only yesterday on RTE's Morning Ireland she was relying on Mr Bolger's experience and expertise in the telecommunications industry to plug the hole left by Mr Thompson's departure.
The Labour spokesman on Public Enterprise, Mr Emmet Stagg, said the Minister seemed utterly incapable of managing Telecom's affairs at the most important point in the company's history.
"In the space of 48 hours, Telecom Eireann has lost the chair and vice-chair of the company. Minister O'Rourke's strategy for the company's flotation is now in tatters," Mr Stagg said.
A Telecom board member, Mr Paul Mackay, who declined to stand down when the board was reshuffled earlier this year, said last night he was highly disappointed that Mr Bolger had resigned.
He said Mr Bolger had been chairman for seven years, during which time he helped oversee Telecom's transformation into a highly profitable company.
Mr Mackay added that Mr Bolger was highly experienced and had good international contacts and experience through his work with accountants KPMG and Greencore.
Ms O'Rourke said she regretted Mr Bolger's resignation and thanked him for his contribution. She insisted the resignations would have no effect on the flotation process.
The new chairman, Mr MacSharry, said he was delighted with Mr Molloy's appointment. He added that the company had a strong board and management team.