Donegal businessman John McNulty has withdrawn his candidacy from the upcoming Seanad by-election.

The leader of the Seanad, Maurice Cummins, this afternoon formally told the upper house that Mr McNulty had withdrawn and asked Oireachtas members not to vote for him.

However, three junior ministers have said they still plan to vote for Mr McNulty.

In a statement earlier today, Mr McNulty said: "I am taking this decision because I believe that to contest the election would be an ongoing distraction from the critical work of Government which is to secure Ireland's recovery through job creation and increased investment. 

"I believe the Government's economic plan is working and the country is now moving in the right direction. 

"This is what all members of Government should be focused on at all times.

"It was my hope, if elected, to support the Government's work in this regard as a member of the Oireachtas and now it is my intention to seek a party nomination to contest the next General Election."

Taoiseach Enda Kenny had been under increasing pressure in the past week over the appointment of Mr McNulty to the board of the Irish Museum of Modern Art.

Read Political Correspondent David Davin-Power's blog.

Last Friday, Mr Kenny said he accepted all the blame for the controversy.

This evening, Minister for Arts, Heritage and the Gaeltacht, Heather Humphreys, who appointed Mr McNulty to the board, said she regretted the controversy.

However, she said she had made the decision and that he had been appointed on merit.

In a statement, she said: "I appointed Mr McNulty and Ms Sheila M O'Regan to the board of IMMA on Friday the 12th September 2014.

"In making the appointments, I was conscious of the balance of talent, experience and skills amongst IMMA board members, the skills need of an institution such as IMMA, as well as gender and regional balance. These are not paid positions.

"Fine Gael party officials made me aware of John McNulty's interest in serving on a board under my remit. I looked at his credentials and on the basis of his business experience and involvement in local cultural projects. 

"I, as Minister, made a decision to appoint him to the board of IMMA. Mr McNulty was appointed to the IMMA board based on merit.

"Fine Gael's candidate for the Seanad bye-election had not been chosen when I appointed Mr McNulty to the board of IMMA, although I was aware that he was among a large number of people interested in running for the Seanad bye-election for Fine Gael.

"I have no role to play in the selection of Fine Gael's candidate for the Seanad bye-election. This is a completely separate process and it is a matter for Fine Gael."

Martin raises appointment in Dáil

In the Dáil today, Fianna Fáil leader Micheál Martin asked the Taoiseach about the appointment of Mr McNulty to the board of IMMA.

He asked did Mr Kenny "ask, direct or suggest" to Minister for the Arts Heather Humphreys that Mr McNulty be appointed to the board of IMMA.

Mr Martin wondered why he was appointed to the board of a national institution when it was clear that he could serve no longer than a few weeks.

The Taoiseach said that it was a case of "bad judgement".

He said that it was beneath the standards that have always applied to Seanad elections.

He said that as president of the Fine Gael party he let his own standards slip and he wanted to accept responsibility.

Mr Kenny said that Ms Humphreys made the decision on the IMMA board appointment.

Responding, Mr Martin said the Taoiseach undermined a key cultural institution and used it as a political tool and he owes that institution an apology.

He said he also used the Seanad and he should apologise as Taoiseach and not in his role as leader of Fine Gael.

Mr Martin said that it is always a worry when people cannot answer straight questions.

He asked why did a person get appointed to the board when they could not serve in any meaningful way.

The Fianna Fáil leader again queried who asked Mr Humphreys to appoint Mr McNulty.

Mr Kenny said there were 29 people seeking the Seanad nomination.

He said he interviewed Mr McNulty and he felt that he was an excellent candidate and he expressed a wish to serve on any cultural body.

His CV was forwarded to the minister by Fine Gael officials. He said the minister made the appointment.

Mr Kenny said he did want to see a situation where a decent man is caught in a "barrage of criticism".

He said the process was "beneath our standard and it was not worthy of winning a seat in these circumstances".

The Taoiseach said Minister for Public Expenditure and Reform Brendan Howlin has published a framework for public appointments.

Sinn Féin leader Gerry Adams said that artist Robert Ballagh has said that the Government's record on the arts is the worst in the history of the state.

He said that the McNulty "stroke" was straight from the Fianna Fáil "handbook on strokes".

He said that the Taoiseach seems to be admitting that Fine Gael asked Ms Humphreys to appoint Mr McNulty to the board of IMMA.

Speaking on RTÉ's Six One programme, Minister of State at the department of Finance, Simon Harris said that the Government had not lived up to its own standards.

Minister Harris said that the Taoiseach had made it very clear that he is not satisfied with how this issue has been handled at party management level.

He added that Minister Humphreys issued a statement, this evening, about how she was approached by Fine Gael officials.

Mr Harris said Fine Gael is a very open party and that the Taoiseach meets with all members of the parliamentary party every Wednesday evening, and that this would happen again tomorrow evening.