Minister for the Environment John Gormley said this afternoon Mr Callely should resign.
'This is an episode that, again, reflects badly on politics.'
Mr Gormley said 'it would be desirable' for Mr Callely to now vacate his Senate position.
The Green Party leader was echoing comments made earlier by Minister of State Seán Haughey, who also said the senator should consider his position as a member of the upper house.
Mr Haughey did stress that it was important for the Seanad Committee on Members' Interests to continue its inquiry into complaints against Senator Callely.
Minister for Tourism, Culture and Sport Mary Hanafin said that she felt that Mr Callely should be allowed to appear before the Seanad committee to give his explanation.
She said that she hoped he would co-operate fully with the committee and that he would 'give the answers that he says he has'.
Two Government senators have already called on Senator Callely to resign because of the damage they believe the continuing controversy over his expenses is doing to the Seanad's reputation.
Green Party Chairman Senator Dan Boyle said the longer Mr Callely served in the Seanad, the more discredit he brought on it.
Fianna Fáil Senator Lisa McDonald also urged Senator Callely to consider his position.
Senator Callely resigned from the Fianna Fáil party two days ago following a meeting with the party committee investigating his expenses.
