The Fianna Fail backbencher, Denis Foley, has resigned from his parliamentary party following the controversy over his admission that he was the holder of an Ansbacher account. In the Dáil tonight, the Taoiseach told deputies of how he first became aware that Mr Foley had an off shore account and what had happened at their meeting before Christmas. However, Fine Gael's Nora Owen accused Mr Ahern of failing to answer the questions put to him, and Labour leader, Ruairí Quinn, said it was staggering that the Taoiseach had allowed two weeks to elapse before meeting Mr Foley.

Last month, Deputy Foley resigned from the Dáil Committee of Public Accounts after the Moriarty Tribunal was told he was a holder of an Ansbacher account. Tonight, Mr Ahern formally announced Mr Foley's resignation from the Fianna Fáil parliamentary party. He said Mr Foley had also informed him he would not be contesting the elections to the Fianna Fáil national executive. He added that Mr Foley was now in effect an independent TD. However, according to the government chief whip, Seamus Brennan, the North Kerry deputy has told Fianna Fáil he will continue to support the coalition in the Dáil.

Mr Ahern was speaking during the resumed debate on an Opposition motion calling on him to state when and how he became aware of Mr Foley's offshore account, and what action he took subsequently. The Taoiseach said the possibility that deputy Foley was involved in the Moriarty Tribunal was first raised by the Government Press Secretary. This was then confirmed by the Attorney General, acting upon information from the Tánaiste. Mr Ahern told the House that at their meeting in December, Deputy Foley admitted that he had been before the Moriarty Tribunal in private session, concerning investments going back 28 years.

The Labour Party leader Ruairí Quinn inquired whether the Taoiseach had actually asked Deputy Foley if this was an Ansbacher account. In reply, Mr Ahern referred him to the script of his speech. The Taoiseach said the revelations about Deputy Foley were disappointing, and that the deputy's view that his offshore account did not conflict with his membership of the Public Accounts Committee failed to demonstrate the political judgement which would be expected of him after long years in the Dáil. Mr Ahern added that he believed the proper course of action would have been for Denis Foley to absent himself from membership of that committee altogether.

The deputy leader of Fine Gael, Nora Owen, accused the Taoiseach of failing to answer any of the questions put to him. She said Mr Ahern's statement confirmed that he had never asked Deputy Foley a single question, which might have given him information. Deputy Owen said it was an insult for the Taoiseach to come into the House and continue to fudge around the issue. The Opposition motion was defeated by 73 votes to 69.

The revelation that Denis Foley held an Ansbacher account has been of great embarrassment to the Fianna Fáil party and the government. It took the shine off the Taoiseach's announcement of his Cabinet reshuffle two weeks ago and put Mr Ahern under pressure from the opposition to say when he first knew about Mr Foley's involvement with Ansbacher. It has been signalled for some days now that Denis Foley would probably resign the Fianna Fáil whip as soon as he had completed his evidence to the Moriarty Tribunal. On paper, the North Kerry deputy's move will be seen as weakening the minority coalition's position in the Dáil. However, his commitment to continue to support the government should ensure his loss of the Fianna Fáil whip, will cause no more difficult than did Beverly Cooper Flynn's six month exile, which ended a couple of months ago.

In a separate development, the Fianna Fáil Parliamentary Party has considered a final draft of a code of conduct for party members. The main provision of the new code is that all election candidates will be required to give a commitment that their tax affairs are in order. There will be thresholds for the amounts of money any candidate can hold on to for use in an election campaign. The new codes will be voted on at the party's Árd Fheis in March.