Communications Minister Pat Rabbitte has said that the country will not pay the €3.1bn promissory note for former Anglo Irish Bank when it is due in March.
He told RTÉ's The Week in Politics that the Government can not pay this "IOU" entered into by the last Government after the collapse of Anglo Irish Bank.
He said the European Central Bank was a difficult institution to "bring around" to stamping the deal Ireland needs on the promissory note.
But Minister Rabbitte said he believes it will happen before the payment is due next March.
Minister Rabbitte said: "But I believe before the note falls due for payment in March that we will get a deal."
Mr Rabbitte was then asked if there was no deal would that then mean Ireland would require a second bailout.
"Personally I don't think it is as stark as that because we didn't pay the promissory note this year and as far as I am concerned we are not going to pay it next year. It's as simple as that."
Elsewhere, Communications Minister Pat Rabbitte has insisted that the cuts to the respite care grant announced in the Budget will not be reversed.
He said that there will be no U-turns on the Budget, despite pressure from some Fine Gael and Labour backbenchers over cuts to Child Benefit and respite care grants.
Meanwhile, Fine Gael Donegal North East TD, Joe McHugh said if the Government is determined there will be no changes to the Budgetary measures then Ministers should initiate a re-appraisal.
Mr McHugh is seeking a re-appraisal of payment structures for those families most in need of respite care services.
He said that this is with a view to ensuring existing daily care services are protected to the greatest extent possible.
Earlier, it emerged that the Chairman of the Labour Party, Colm Keaveney, had written to the party's rank and file members to seek their views on last week's Budget.
The Galway East Deputy said today that there had been a significant response from members to last Friday's correspondence.
The views of members will be conveyed to the Labour leadership.
Meanwhile, there is also continued unease among some Fine Gael backbench TDs to cuts in the Budget.
There is some pressure building to seek changes to measures on Child Benefit and respite care grants.
However, that has to be set against tough line taken by Taoiseach Enda Kenny and Tánaiste Eamon Gilmore, who have both insisted there will be no changes to the Budget.
Despite the political difficulties for TDs in both parties there have been no signs, as yet, that any TD is willing to vote against the Social Welfare Bill, which will give legal effect to the cuts, later in the week.