Minister for Justice Alan Shatter has denied using confidential garda information to damage a political opponent.
In a statement to the Dáil this evening, Mr Shatter said he was not in the business of receiving, seeking or maintaining confidential, sensitive information from the gardai about TDs, Senators or anyone in political life.
Mr Shatter said he regretted that his comments may "have inadvertently resulted in concerns being expressed that I am prepared to use confidential garda information to damage a political opponent".
He said there could be exceptional circumstances in which a Minister for Justice could receive confidential information about members of the House.
However, he insisted that he made no allegation of wrongdoing against Mr Wallace.
The minister said the information about Mr Wallace being spoken to by gardaí about using his mobile phone while driving came during the course of a conversation with the Garda Commissioner on a number of matters relating to the penalty points issue.
He said the Commissioner was "mindful" that Mr Wallace might make public reference to the incident himself and "in those circumstances, he had a duty to mention it to me".
Mr Shatter said Mr Wallace and his colleagues have demanded transparency in relation to the issuing of penalty points.
He said Mr Wallace said at the start of the Prime Time debate that gardaí should not exercise discretion and their doing so was unlawful.
Mr Shatter said he believed in that context it was necessary and in the public interest to point out that Mr Wallace had himself been a beneficiary of "that discretionary exercise".
Dep Wallace said he did not believe that the minister acted in the public interest when he made his remarks on Prime Time.
In a statement, he accused Mr Shatter of being politically motivated and asked why there was no independent report into the whistleblower claims on penalty points.
Earlier, Taoiseach Enda Kenny said the minister was not attempting to undermine Mr Wallace by using information he had received from the gardaí, but only to undermine his argument.
On RTÉ’s Prime Time last Thursday, Mr Shatter revealed that gardaí had used their discretion not to give Mr Wallace penalty points.
In the Dáil this afternoon, Opposition TDs challenged the Taoiseach on whether the information, which came from a garda briefing, should have been used in the course of political debate.
Fianna Fáil leader Micheál Martin said Mr Shatter had "crossed the line" and had undermined democratic standards by using private information for political gain.
He said the Taoiseach did not seem to "get" the seriousness of the issue.
Mr Martin said the clear implication of Mr Shatter's comment was to warn people that "if you question us too much, we will get you".
Sinn Féin leader Gerry Adams said the attitude of Minister Shatter was annoying people.
Mr Adams called for an independent investigation into the penalty points issue, including the minister's handling of the situation.
But Mr Kenny defended Mr Shatter and insisted that the minister is not keeping files on other deputies, nor was he alleging wrongdoing by Mr Wallace.
Speaking on behalf of the Technical Group, Independent TD John Halligan asked the Taoiseach if Mr Shatter was acting under the authority of the Taoiseach when he appeared on Prime Time.
Mr Kenny confirmed he was not briefed or informed about it.
He pointed out that what Minister Shatter said was not an allegation and that it was confirmed by Mr Wallace the following day as being true and accurate.
Complaints lodged over comments
Meanwhile, Mr Wallace has lodged a complaint with the Standards in Public Office Commission in relation to the remarks.
The Independent TD said he was not looking for Minister Shatter's head, he just wanted answers.
Mr Wallace yesterday lodged a complaint with the Office of the Data Protection Commissioner, asking them to investigate what he considers to have been an improper disclosure.
Tánaiste Eamon Gilmore has said there were issues "that have to be looked at" arising from the use of the information by Mr Shatter.
Speaking to RTÉ News, Mr Gilmore said he had full support for the Minister for Justice, but he said the controversy had raised issues of public concern.
Asked whether he had concerns over the use of garda information for political purposes, Mr Gilmore said: "I think the public have concerns".
Fianna Fáil has accused Minister Shatter of acting as "judge, jury and executioner" in the case and then trying to act as judge and jury on his own behaviour.
Justice spokesperson Niall Collins repeated his call for the minister to resign, saying Mr Shatter had looked for the resignations of Bobby Molloy and Willie O'Dea in similar circumstances when he was in opposition.
Mr Collins said Mr Shatter had a number of questions to answer in the Dáil, including who gave him the briefing and whether he had similar information on other individuals.