Taoiseach Brian Cowen has been forced to abandon plans for a new high-powered body to salvage the Lisbon Treaty amid ongoing disunity in the 'Yes' camp.
The Dail was due to be recalled this week to set up the cross-party committee to examine the outcome of June's referendum defeat and decide on the future of the treaty ratification.
But failure to reach agreement with Fine Gael and Labour has resulted in the plan being dropped.
Although it is widely acknowledged there will have to be a second referendum, the Government is aware it needs to keep the other 'Yes' parties onside.
The Government is now weighing up its options, but is not in favour of passing the problem on to an existing Dail committee covering European affairs. The move comes as pressure continues to be brought to bear on the Government to come up with a solution.