Fine Gael and Fianna Fáil expect an agreement on support for the formation of a minority government to be reached on Friday despite continued tension on the issue of water charges.

The parties are at odds over the wording of legislation to give effect to an agreement reached on Irish Water.

The two parties did not meet on Thursday to further discuss Fianna Fáil’s support for a Fine Gael-led minority government but were in contact throughout the day.

An agreement between the two parties would pave the way for Fine Gael to start seeking support from Independents over the weekend.

The Irish Times on Thursday learned of a dispute between the parties over the wording of proposed legislation on water charges.

Fine Gael has prepared a draft bill to suspend the charges for nine months and to establish an independent commission to consider the charging regime.

However, the legislation does not include the instruction to allow the Dáil decide the outcome of the levies which is part of the proposed agreement between the parties.

The bill instead states the decision will be made by way of a ministerial order.

Fianna Fáil is urging Fine Gael to change the wording of the legislation to reflect the decision made earlier this week to allow the Dáil decide.

It is understood Fine Gael is willing to state it in the political agreement reached by the two parties but it is unwilling to place it in legislation.

Under Dáil rules opposition TDs are not allowed to table any legislation that would impose a cost on the Exchequer.

Explicit say

Fianna Fáil believes that unless the new legislation gives the Dáil an explicit say in the future of water charges, the power to set charges would rest solely with the minister for the environment at the time.

Irish Water still remains the major hurdle to be overcome if Fine Gael is to secure Fianna Fáil’s support but progress has been reported in talks on housing and education.

The future of supports such as rent supplement and mortgage interest relief have still not been agreed with Fianna Fáil seeking a 15 per cent increase in the former.

It is understood Fine Gael has been warned not to accept such an increase by the Department of Social Protection.

A party source said the advice is increases in rent supplement will result in rent increase for everyone.

A Fianna Fail source said housing supports are “crucial” to any agreement and an increase will be demanded on Friday.

Furious

Fianna Fáil TDs are also furious at comments made by Minister for Health Leo Varadkar in an interview on RTÉ radio on Thursday morning.

Mr Varadkar said the suspension of water charges was wrong and not in the public interest.

Fianna Fáil TD Michael McGrath, who is a member of the party’s negotiating team, said Mr Varadkar’s comments were unhelpful and self-serving.

He said his party would not throw the toys out of the pram over them but he questioned what the purpose of them were.

“The comments were in the context of what is going on internally within Fine Gael. That is clearly our view of the issue,” he said.

“That is not helpful to the negotiations. You do have to question why those comments were made. He questioned the integrity of our party.”

Fianna Fáil Cork North Central TD Billy Kelleher said Mr Varadkar's hypocrisy knew no bounds.