Fianna Fáil is to move to expel Beverley Cooper-Flynn from the Parliamentary Party and the Organisation.
A statement this evening said the Taoiseach would be proposing the removal of the whip from the Mayo deputy at next Tuesday's meeting of the Parliamentary Party.
A special meeting of the Fianna Fáil national executive will then be convened to decide on a motion to expel her from the organisation.
Senior party figures studied this morning's Supreme Court decision to reject her appeal over her failed libel action against RTÉ.
The announcement has been welcomed by the Labour Party, which said the measures must be followed through with no backing off.
The Mayo TD was expelled from the last parliamentary party when her colleagues passed a motion saying it would be better if she stepped down pending her appeal.
She fought the election as a Fianna Fáil candidate and was quietly readmitted when the new Dáil met.
A report on NIB by High Court inspectors who have been investigating her former employers is due to be published in June, and is likely to detail how Ms Cooper-Flynn's unit in the bank sold insurance policies in a manner that encouraged tax evasion. She may well be named herself by the inspectors.
All the opposition parties were of one voice this afternoon in urging the Taoiseach to take immediate action.
Supreme Court's unanimous decision
The Supreme Court's five judges unanimously rejected the appeal, and upheld the verdicts a High Court jury gave in 2001.
The jury found that she was not libelled by a series of broadcasts in 1998, which implicated her in encouraging people to evade their taxes during her employment as a financial advisor with National Irish Bank.
Ms Cooper-Flynn's libel action was the longest running such action to come before the High Court and the TD was left with a legal bill estimated at £2m.
She will now also face costs for the two-day Supreme Court hearing.
'Disappointment' of Ms Cooper-Flynn
Afterwards, Ms Cooper-Flynn said she was very disappointed but had to accept the decision of the courts. She also said her future in Fianna Fáil was a matter for the parliamentary party and was out of her hands.
RTÉ said it was delighted, adding that the case underlined the need for libel law reform.
Meanwhile, Fine Gael called on the Taoiseach, as leader of Fianna Fáil, to take 'immediate action' following the Supreme Court decision.
The Court's decision
A central issue in the appeal was whether the trial judge had misdirected the jury on the issue of majority voting.
All five judges found that while the trial judge had so misdirected the jury, no substantial wrong or miscarriage of justice had resulted which would justify a new trial.
To order a new trial on the basis of a misdirection to the jury which was consented to by all parties, would, the court found, be clearly unjust.
The Chief Justice said it would have been preferable if the trial judge had directed the jury in strict accordance with the law on this issue. However he said it was 'beyond argument' that the verdict of the jury was determined by a majority vote of nine of the 12 members as required by the relevant legislation.
There should be no retrial where the possibility, let alone the probability of any substantial wrong or miscarriage of justice had not been established.
Mr Justice Keane also quoted from a decision of the English law lords in the Grobbelaar case which stated that defamation 'affords little or no protection to those who have, or deserve to have, no reputation deserving of legal protection.' He was satisfied that the same considerations applied in the Cooper-Flynn case.
Only one of the five judges, Mr Justice Fennelly, found in favour of Miss Cooper-Flynn on one of her four grounds of appeal in relation to the admission of a document. However, he was satisfied that no miscarriage of justice arose as a result.
Mr Justice Geoghegan said that a new trial would involve setting aside the finding in favour of Ms Cooper Flynn as well as the finding against her. There would have to be a new trial on all issues which would itself be a gross injustice to the defendants.
Read more on the background to the case in Ms Cooper-Flynn's profile in the Oireachtas Guide
