Minister for Education Ruairi Quinn has said the CAO system needs to be reviewed to take into account the new profile of third level entrants.
Speaking at a conference on the future of higher education, the Minister said the current system was designed around the dominant needs of full-time, school leaver applicants.
He said it did not fully suit the growing emphasis on flexible or part-time third level provision aimed at a much more diverse group of learners.
Mr Quinn said the CAO enjoyed widespread public confidence and support, but he said new systems of third-level entry were evolving and there was a lack of transparency and probably an inconsistency around the recognition of prior qualifications and experience for adult learners.
The Minister also reiterated concerns about the adverse impact of the points system on the learning experience at second level and on the readiness of new entrants into higher education.
He said we had to address the demands and pressures created by the current points system as part of a wider reform process.
Next September the National Council for Curriculum and Assessment and the Higher Education Authority will meet to discuss alternatives to the current points system.
Earlier, the Minister said no decision had been made on the possibility of re-introducing third level fees.
He said the issue of finance at third level would have to be addressed, but he said no proposals are being considered.
Minister Quinn said Government would have to look at ways to finance the sector.
He said a balance between the cost of providing education and benefiting the community from those educated needs to be struck.
Asked about proposals in the Hunt Report, he said he would not pre-empt a debate on funding third level fees.
Speaking after addressing a discussion forum on the Hunt Report, the minister said he had not been feeling pressure from Government colleagues on the introduction of fees.
Minister Quinn also told the forum there is a need to build 20 post primary schools over the next five years.
Each of the schools should have a capacity to cater for 1,000 students, he said.
The minister said that he would be submitting a formal paper to Government on the issue in the near future and said it was necessary given the scale of the demographic challenge.