Minister for the Environment Alan Kelly is unwilling to accept more restrictive moves on notice periods for rent increases in exchange for dropping his proposals to link rent to inflation.

Negotiations between Mr Kelly's department and the Department of Finance on a housing package are to resume this week but sources say agreement is still at least a number of weeks away.

Mr Kelly has pushed the idea of linking rent increases to the consumer price index for up to four years but has been met with stiff resistance from the Minister for Finance Michael Noonan and others in Fine Gael. Sources said there were ill-tempered exchanges between Mr Noonan and Mr Kelly at a Cabinet subcommittee meeting last week.

Mr Kelly's Labour colleague, Minister for Public Expenditure Brendan Howlin, has also been cool on the proposals. Senior Coalition figures say Mr Kelly had staked so much politically on the housing package that a compromise may have to be found.

A Fine Gael source said: “I can’t see rent certainty being agreed but probably more restrictive measures on notice to increase rent etc.”

Tighter timeframe

However, Labour sources say this is unacceptable and insist they will be pushing for rent certainty for at least a number of years. While Mr Kelly had initially sought a period of four years, he is now understood to be willing to accept a tighter timeframe.

It is understood another measure being put forward by the Department of the Environment would allow tenants pay rents to a receiver in a situation where a landlord has gone into receivership.

A source said that, at present, in most cases where a landlord goes into receivership, the tenants are asked to leave the accommodation. Proposals put forward by Mr Kelly would see tenants pay their rent to receivers.

Fine Gael figures have also put forward the idea of allowing landlords “opt in” to a rent certainty arrangement in exchange for tax incentives, and have consistently emphasised that the supply of housing remains the main problem.

Some Labour figures believe a shorter-term solution is needed because of the housing and homelessness crisis, which they believe will get worse in the coming months. “There are likely to be more incidents involving homeless people,” said one.

Tánaiste Joan Burton had also floated a proposal of a rent regulator or an increased role for the Private Residential Tenancies Board. However, one source suggested that Ms Burton may be providing cover to allow Mr Kelly and Mr Noonan reach a compromise.

The pair will take part in a press conference in Limerick today to mark the launch of the Coalition's Action Plan for Jobs for the mid-west region.

It is understood Mr Kelly would agree to development levies being abolished as long as local authorities are still left with adequate funding streams.

Starter homes

One proposal discussed in pre-budget negotiations would have meant builders would not be required to pay levies to local authorities when they construct starter homes in Dublin and some other parts of the state. Under such a plan, local authorities would have to forego up to €100 million in levies from builders.

However, a source close to Mr Kelly said agreeing to the abolition of levies is contingent on rent reforms.