The Cabinet has decided to oppose a Fianna Fáil bill aimed at tackling mortgages that have fallen into arrears which is being debated tonight.
Ministers have decided to refer the issue to a joint committee.
It is understood that ministers feel that while the new insolvency regime is working, it needs to be energised, as a Government spokesman put it, so that there is a greater turnover.
It is also understood that there is concern in Government circles that the Fianna Fáil bill would discourage institutions from lending, and raise questions about lenders property rights that would give rise to concerns about a constitutional challenge.
Fianna Fáil finance spokesman Michael McGrath began tonight’s debate by saying the reality is that the Insolvency Service was not working, but failing abysmally.
Earlier, he appealed to the Government to support his bill on removing the bank veto on proposals to restructure a family home mortgage through the personal insolvency service.
Under Mr McGrath's bill, the insolvency service would have the final say in relation to the restructuring of a mortgage.
Speaking on RTÉ's News at One, Mr McGrath said the bill is focused on family-home mortgages and said if the Government is wise it should support or enact it.
He said that the banks are not afraid of the insolvency service and there has been a significant ramping up of repossession by the banks.
On the same programme, New Beginning's Ross Maguire said a potential 30,000 families could be facing re-possession orders.
Mr Maguire said courts around the country are being inundated with applications made by banks for re-possession of family homes.
He said such is the volume of re-possession cases coming before the courts that separate lists are being created in some Circuit Courts.
He said 218 cases are currently before the courts in Limerick, 131 in Ennis, 58 in Naas, 62 in Cork and 100 every week in Dublin.
Mr Maguire said the repossession orders themselves are starting to take place and he believes it is going to become a political problem.
He said we have gone from a country where home repossessions were very rare to a country where they may become standard.
During Leaders' Questions, Fianna Fáil leader Micheál Martin said the scale of mortgage arrears was enormous and said there had been a wave of repossessions and court actions.
Taoiseach Enda Kenny said the solution put forward by Fianna Fáil was not a solution because they were referring all the cases to a court of law.
He said what it was talking about in its bill did not deal with the thousands who have not engaged with the banks at all.
It is also understood that while there are a range of views across government about Labour TD Willie Penrose's bill which would reduce the period of bankruptcy from three years to one, his party leader Joan Burton is broadly supportive.
Forum to consider pay, tax and spending priorities
Earlier, Minister for Public Expenditure and Reform Brendan Howlin confirmed he plans to establish a forum to consider pay, tax and spending priorities for the Government.
Speaking ahead of this morning's Cabinet meeting, Mr Howlin said the process would be part of a national dialogue, but said it was "not envisaged that we would have social partnership in the old sense".
He said the Government wanted greater social involvement in the budgetary process, adding that he wanted the forum to be inclusive, involving local communities and the Opposition.
The minister said he had not yet discussed the forum with unions, because he wanted to bring it to Cabinet first.
He said the structure of the forum had not been decided and would have to be considered by the Government, but he said he hoped to have the process established after the publication of the spring statement.
Mr McGrath said Fianna Fáil needed more details about the forum but would remain open to the idea.