Fianna Fáil leader Micheál Martin has said Denis Naughten made the right decision to resign from his role as Minister for Communications.

Mr Martin was speaking in the Dáil after Taoiseach Leo Varadkar told the house that Mr Naughten had at least four private dinners with David McCourt, a US businessman involved in the tender for the broadband plan.

Mr Naughten made a short statement in the Dáil this afternoon, announcing he was resigning as Minister for Communications, Climate Action and the Environment and saying he had lost the confidence of the Taoiseach.

The Cork-South Central TD acknowledged it was a difficult and sad day for the former minister, who he said he knows a long time.

He said office holders and decision makers of such a substantial tender need to be insulated from a perception of favouritism.

The Fianna Fáil leader advised the Taoiseach that when the Opposition raises legitimate questions, they should be listened to.

Sinn Féin leader Mary Lou McDonald has said there is no doubt the tender process for the National Broadband Plan is compromised, the question is just to what degree.

She said it was profoundly shocking that the clock may now be put back to zero on the process.

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Ms McDonald also asked the Taoiseach to clarify the position around Minister of State Pat Breen, who was also met Mr McCourt.

She asked the Taoiseach to clarify how long a review of the NBP process, which is to be carried by Peter Smith, would take.

Solidarity TD Paul Murphy warned "the Government has now no effective majority."

"If Fianna Fáil abstain and if the so-called Independents vote against and if Mr Naughten comes to the Opposition, the Government doesn't have a majority," he said.

He added: "In my opinion this Dáil should now pass, as quick as is possible, the abortion legislation and then it should be dissolved. We should have an election and we should let the people decide."

Earlier, after Mr Naughten announced his resignation, Fianna Fáil's Timmy Dooley said he felt sympathy for the Roscommon-Galway TD because no one in Opposition sought his resignation.

He said what they sought was to shine a light on a process that was "fatally wounded" because of the withdrawal of the other bidders.

He said Mr Naughten was a man of substance, despite the mistakes he had made along the way.

Speaking on RTÉ's Six-One News, the Minister for Finance Paschal Donohoe said he accepted the Taoiseach's account of when he was informed about the meetings between Mr Naughten and Mr McCourt, who is leading a consortium bidding for the state broadband contract.

Minister Donohoe said that it is not time yet to call for a general election, even though the Government is now down to 54 votes.

He said that the it is now imperative that the Taoiseach Leo Varadkar and the Fianna Fáil leader Micheál Martin engage in discussions about extending the confidence and supply agreement quickly as there is a lot to get through over the next few weeks - the October European Council meeting to discuss Brexit, a finance bill to implement and passing social welfare legislation through the house.

Additional reporting: Conor McMorrow, Edel McAllister