The Government has set up a commission of investigation to examine the widespread recording of phone calls at Garda stations across the State since the 1980s.

The revelations could have an impact on court cases past and present.

It is understood Minister for Justice Alan Shatter and Taoiseach Enda Kenny were made aware of the latest developments over the weekend. Ministers were informed at the weekly Cabinet meeting this morning, and Mr Kenny also briefed Fianna Fáil leader Micheál Martin and Sinn Féin leader Gerry Adams this afternoon.

A Government statement issued after the Cabinet meeting this afternoon said the implications of the matter were “ potentially of such gravity that the Government has decided to set up a statutory Commission of Investigation into this matter of significant public concern.”

The news came only hours after Garda Commissioner Martin Callinan resigned over the continuing controversy surrounding the squashing of penalty points and the treatment of the Garda whistleblowers who highlighted the practice.

Mr Callinan has faced repeated calls to withdraw his remarks at an Oireachtas committee in January that the actions of the whistleblowers - retired Garda John Wilson and serving Garda Sgt Maurice McCabe - were “disgusting”. Yesterday Labour mounted pressure on its Government colleague the Fine Gael Minister for Justice Alan Shatter to withdraw remarks he made in the Dáil that they two men had not co-operated fully with an internal Garda inquiry.

Mr Kenny told the Dáil this afternoon that he would not be asking Mr Shatter to resign, adding: "The Minister for Justice on behalf of the Government will continue to reform the justice system, will work now to introduce an independent statutory authority for An Garda Síochána that will bring our system into the modern era."

Today’s Government statement said there was widespread recording of phone calls to and from Garda stations .

The statement said: “The practice of making recordings was in place for many years and was discontinued in November of 2013”.

It added: “It is not yet clear why this practice was in operation.”

“In the context of ongoing legal proceedings in a particular case, the Government has learned that a system was in place in a large number of Garda stations whereby incoming and outgoing telephone calls were taped and recorded. The Government was informed of this new information at its meeting today.”

“The implications of this matter are potentially of such gravity that the Government has decided to set up a statutory commission of investigation into this matter of significant public concern.”

“The Government is extremely concerned about this information.

“The Government has asked for a full, detailed report on all aspects of this matter from An Garda Síochána and the Department of Justice and Equality, so that an informed decision can be made on the legal and other consequences, with the assistance of the Attorney General.

“The terms of reference for the commission of investigation will be decided shortly, once a full report on the circumstances has been made available to the Government.”

The Government meeting also accepted Martin Callinan’s resignation as Commissioner, with Deputy Commissioner Nóirín O’Sullivan “appointed as interim Garda Commissioner”.

The Coalition also “reiterated its commitment to the reform of Garda oversight and accountability.

“This will include the establishment of an independent Garda authority, which is appropriate to Ireland’s needs and which will maintain appropriate democratic accountability to the Oireachtas.

“The Government will bring forward the full detail of its comprehensive reform proposals in the coming months.

“This will be done following the completion of the current inquiries by Judge Cooke and Mr Guerin, the forthcoming hearings by the Oireachtas Committee on Justice, Defence and Equality and the Review of the Garda Síochána which is currently underway under the Haddington Road Agreement.”