Mr Justice Donald Binchy has said he never intended to, nor could he, restrain TDs from making statements in the Dáil or to restrict the fair and accurate reporting of such statements.
He said it was never the intention of his High Court order on 21 May in Mr O'Brien's application against RTÉ to restrict utterances in the Dáil or the reporting of them.
The judge made the comments at a hearing to clarify the scope of an injunction granted to Mr O'Brien to prevent the broadcasting details of his personal banking arrangements at the High Court.
Counsel for Mr O'Brien Michael Cush said he would be making an application to vary the court order to allow the reporting of independent TD Catherine Murphy's speech last week.
He said it was never Mr O’Brien's intention to stop TDs from speaking.
He also said Mr O'Brien intended to take fresh proceedings to ask the courts to establish the demarcation between the respective roles of the courts and the Oireachtas.
Counsel for RTÉ David Holland said the broadcaster had only heard of the application to vary the order in this respect in the few minutes before the hearing but he said it would be churlish not to welcome it.
Ms Murphy has said she is pleased with the clarification.
She said she believed it was important the media has an opportunity to fairly report what is said in the Dáil.
Ms Murphy said her primary objective remained getting a full, independent inquiry into some of the issues in relation to the Irish Bank Resolution Corporation.
She said that was to be pursued in the place that was right to pursue it - the Dáil.
Speaking on RTÉ's Six One News, Ms Murphy said that she is confident of her sources and of her information.
She said: "I checked and double checked before I put that information into the Dáil.
"No, this is not a personal matter between me and anyone. This is about IBRC, this is about getting an inquiry that is independent, that is competent, that is robust."
On 21 May, Mr O'Brien and the IBRC were granted orders by the High Court preventing RTÉ from broadcasting a report about Mr O'Brien's personal banking arrangements with the bank.
Mr O'Brien had sought the order, saying he would suffer irreparable harm if the report was broadcast.
Mr Justice Binchy granted the order in Mr O'Brien's favour.
He also granted an order to the bank preventing RTÉ from broadcasting any legal advice given to IBRC arising from the banker-customer relationship with Mr O'Brien.
The judge ruled that none of the contents of his judgment can be reported until lawyers agree on which parts of it should be redacted.
This means that none of the judge's conclusions, read out in court, have yet been reported.
In the meantime, Ms Murphy disclosed more detail about Mr O’Brien's dealings with IBRC in the Dáil on Thursday.
Many media outlets, including RTÉ, did not broadcast her comments amid concern that to do so would breach the High Court order.
RTÉ went to the High Court this morning to seek clarification on the scope of the judgment.
Mr Cush told the court that Ms Murphy's statement to the Dáil was inaccurate and was made with "conscious disregard" for the injunction and in breach of standing orders.
However, he said this was "legally irrelevant" to today's application to vary the order.
He said it was no part of Mr O’Brien's intention or the courts to seek to restrain deputies.
"The court could not do it. We knew that and we didn't ask for it," he said.
Lawyers for RTÉ said the application to amend the order by lawyers for Mr O’Brien did not go far enough as it only related to Ms Murphy's statement on 28 May.
They said the application to vary illustrated a difficulty for RTÉ.
Mr Holland said "on the one hand he [Mr Cush] says it was never intended this order would restrict reportage of what would happen in the Dáil but all he proposes is that the order be amended to cater for a specific utterance in the Dáil on May 28th."
He said it illustrates a difficulty for RTÉ as "for all we know there may be many more in the Dáil".
"We cannot come into this court every time somebody says something in the Dáil... he completely fails to meet the fact that generally there should be no restriction of reportage" of the Dáil.
Mr Holland said that for Mr O’Brien to now say the order was never intended to restrict reportage of Dáil proceedings was "a little bit rich" and was a "spectacular climb down" as he had issued solicitors' letters to some media outlets claiming it would breach the injunction.
He said it was entirely necessary for RTÉ to come to court to seek clarification.
However, Mr Cush said it was entirely consistent as he did not mean Mr O’Brien was changing his position in relation to reportage of the Dáil but had maintained that he never sought to restrict utterances in the Dáil.
Mr Justice Binchy then intervened to say that he could "help" and said it was "never intended, nor could it have been intended, that any order of this court would impact upon entitlements of deputies to speak as they see fit or the entitlement of the media to report on those utterances".
However, he said, it was entirely understandable that RTÉ came to court to seek clarification.
Mr Holland also said the controversy had raised a whole new aspect to the case and that Mr O'Brien had said Ms Murphy had lied to the Dáil.
He said there was a whole new public interest aspect to the case now and RTÉ would need to consider what information should be made available to the public.
The full judgment of the High Court in the case may be available tomorrow.
Mr Justice Binchy said he would finalise the parts of the judgment to be redacted after hearing legal argument from both sides today.
RTÉ had argued that many of the redactions proposed were now pointless due to the amount of information now in the public domain.
Lawyers for Mr O'Brien objected to this and said the court should not have to engage in an exercise of dissecting comments made elsewhere to see if they applied to the judgment of the court.
In a statement this evening RTÉ welcomed the High Court clarification, saying it "very much welcomes the fact the judge clarified that both comments made in the Dáil in the past and future comments in the Dáil are covered by privilege, and that media, including RTÉ are free to report them."
Speaking outside the High Court earlier, Deputy Director-General and Managing Director of News and Current Affairs Kevin Bakhurst said it was entirely right that RTÉ brought this application.
RTÉ's Deputy Director-General Kevin Bakhurst gives his reaction to today's court proceedings. https://t.co/ocSonA6HRJ— RTÉ News (@rtenews) June 2, 2015
Mr Bakhurst said that it was necessary for RTÉ to do so to get clarity.
He said it sends out an incredibly important message to members of the Dáil and also to members of the press in Ireland.
Senior counsel for the Irish Times, who had also planned to make an application today, welcomed the judge's comments.
Michael O'Higgins said reporting what was said in the Dáil was essential to newspapers.
He said the paper had been contacted and told that the publication of Ms Murphy's comments on 28 May would result in proceedings being brought against it.
Mr O’Brien this afternoon said: "I welcome the decision by Mr Justice Binchy to release the judgment tomorrow which will outline the reasons for granting the injunction against RTÉ."
In a statement, he said "Ms Murphy has not once declared that she categorically and unequivocally stands over the veracity of the information she has put before the Dáil. This is the most revealing and disturbing aspect of this entire affair."
Government welcomes clarification by Mr Justice Binchy
A Government spokesperson has said: "The Government welcomes today’s clarification by Mr Justice Binchy. The right of Oireachtas members to exercise privilege is constitutionally protected and this has been reaffirmed by the judge.
"It is important that right is exercised responsibly and in the public interest and that the media are agreed to report fairly on such statements."
Earlier, Sinn Féin Deputy Leader Mary Lou McDonald said: "The primacy of Dáil privilege has been reasserted.
"I don’t think it is lost on anyone that the Taoiseach and the Tánaiste were absent from this whole controversy and failed to assertively protest the rights of the Dáil and TDs".
Ms McDonald said her party will be looking for a debate on the matter next week.
Fianna Fáil Senator Thomas Byrne welcomed Mr Justice Binchy’s comments.
He said: "I think he (Mr Justice Binchy) has reaffirmed a principal that has widely been known and accepted that what is said in the Dáil is privilege and the reporting of it is privileged also. It is a very important point of principle."
He also said that it is worrying that the Houses of the Oireachtas and the Government were "so slow to react".