Independent TD Finian McGrath has said he has informed the Government that he will withdraw his support unless the plan to remove the automatic right to a medical card for people over 70 is withdrawn completely.
He said he had contacted the office of the Taoiseach to tell him of his position.
The Minister for Finance, Brian Lenihan, has said he very much regretted any distress caused over the removal of the automatic right to a medical cards for people over 70.
He said the Government was formulating proposals and would sort out the problem for those concerned by 1 January, the date the new regulations would come into force.
Mr Lenihan said the Government was initiating a process with the medical profession to examine how the medical card system could be sustained.
He said the Government decided the current medical card system could not be sustained with the resources available to it.
In Limerick, around 50 people gathered outside the constutuency office of the Minister for Defence, Willie O'Dea, to protest at the the decision to remove the automatic right to a medical card for people over 70.
No change to medical card move: Harney
Earlier, the Minister for Health and Children said there will be no change to the Budget announcement on the medical card scheme for the over 70s.
Speaking on RTÉ Radio's Marian Finucane, Mary Harney said she accepted there had been what she described as a major communications confusion over the issue.
She said the Cabinet was aware of the difficulty that would arise in making the decision.
The leader of the Labour Party has claimed that many elements in the Budget will cause as much controversy as the medical card issue has.
Eamon Gilmore noted that the Government has still not withdrawn its pledge to end the automatic entitlement of those over 70 to a medical card.
A cruel and heartless attack on working people and middle income families was how Mr Gilmore characterises this week's Budget in a statement released today.
He accused the Government of using the budget to target the poorest people in our society, and hit them hardest.
He demanded the Government give a clear and unambiguous statement that it is going to reverse the decision to take away the automatic entitlement to medical cards from those over 70.
He warned that the uproar seen this week is only the beginning.
Deputy Gilmore also highlighted the decision to increase class sizes, saying it will do enormous damage to our education system.
He is concerned that the new 1% tax levy may jeopardise the prospects of having the recent national agreement ratified.
He said that the Labour Party will continue to fight to have all these decisions reversed.
Cowen hints at medical card rethink
Taoiseach Brian Cowen has said he will set up a process in the coming weeks with the Irish Medical Organisation to try to change the structure of the new medical card scheme.
But Fine Gael leader Enda Kenny accused Mr Cowen of spreading more confusion on the issue.
In a hastily arranged interview on last night's RTÉ's Nine O'Clock News, Mr Cowen said he hoped to negotiate a new agreement which would help more people keep their medical card.
He insisted he was confident he would get cooperation on the issue from the medical profession.
However he said that he had yet to make official contact with the IMO.
Mr Cowen described the Budget initiative as a pragmatic response to meet legitimate public concerns, and said he understood those concerns.
He said the present scheme to provide cover for the over 70s had been negotiated in good times and was no longer sustainable.
Mr Cowen also said it was important for people to remember that there will be no change in the medical card system until 1 January.
He was speaking after yesterday's resignation from his party of Fianna Fáil TD for Wicklow Joe Behan, and appeals from many of his colleagues for the decision to be re-considered.
IMO President Dr Martin Daly said today that the IMO noted the Taoiseach's comments, but could not make a further comment at this stage.
Mr Kenny said Mr Cowen had only added to the confusion, claiming his intervention would prolong the anxiety being felt by the elderly of this country.
The FG leader repeated his call on the Government to reverse the controversial decision, and secure savings elsewhere.
Age Action Ireland, which seeks better policies and services for the elderly, welcomed the Taoiseach's intervention.
The lobby group said the move showed that the Government recognised the unfairness of the proposed changes.