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Coalition talks to get under way

Behind-the-scenes negotiations to form Ireland's next government will begin today.

Fine Gael leader Enda Kenny will discuss options for a new coalition with the Labour Party and separately with like-minded independents after steering his party to an historic victory at the polls.

But before any calls were made, all sides accepted a deal has to be struck inside a week as Ireland faces a series of challenging hurdles linked to its multibillion euro bailout and banking crisis.

Fine Gael's director of elections Phil Hogan said pressure from Europe would force a quick decision on coalition.

"There seems to be a realisation that there are some important decisions coming up for the country in the context of EU matters," he said.

The Dail (parliament) is scheduled to sit again on Wednesday March 9.

Mr Kenny is due to travel to Helsinki on Friday for a meeting of the European People's Party, with which Fine Gael is affiliated.

The contacts are intended to open the door for a charm offensive and garner support to renegotiate Ireland's €85bn loan from the International Monetary Fund (IMF) and Europe.

Labour leader Eamon Gilmore, who will meet left-leaning European colleagues separately on the same day, was in prime position to join a coalition after steering his party to second place.

But Fine Gael also has the option of securing a pact with independents if Mr Kenny can get enough like-minded non-party TDs on board.

He is to make the first contacts with potential partners by phone.

Mr Gilmore warned there was limited time for a deal to be done.

"If Fine Gael want a government for a period of five years, strong, stable that brings together the two largest parties, in what will be the closest we're going to get in this country to essentially a national government, the Labour Party is willing to play its part in that," he said.

"But I do say that the window of opportunity for that to happen is very narrow."

Fine Gael faces difficult talks with Labour with the sides at odds over the length of time it will take to turn around the budget deficit, tax, public sector cuts, water charges and how to tackle bondholder responsibility for banking debts.

Labour also warned it has its own parliamentary party hoops to jump through if it wishes to enter government.

But depending on the numbers, Mr Kenny could turn to independents, with the new Dail parliament home to a significant non-party bloc spearheaded by former Senator Shane Ross and developer Mick Wallace.

But thrashing out a coalition with them could prove difficult given a sizeable amount of left-leaning TDs, while former stockbroker Mr Ross is also demanding a referendum on the IMF/EU loans.

Mr Kenny has vowed to force Europe's hand on renegotiation of the deal - but has made no mention of a referendum.

The Mayo poll-topper, who secured the largest vote in the country, said he wanted a quick resolution to talks on a new government.

"We don't want a situation where this is going to be dragged out," Mr Kenny said.

Fine Gael remains on course for about 75 Dail seats, just a handful shy of majority single party government in the 166-strong parliament.

His centre-right party continued to make gains on the second day of counting yesterday.

Meanwhile, their traditional rivals in Fianna Fail are reeling from high-profile losses across the country including outgoing Tanaiste Mary Coughlan, defeated in her Donegal South-West constituency and the loss of tourism minister Mary Hanafin's seat in Dun Laoghaire.

She was knocked out by People Before Profit candidate Richard Boyd-Barrett, a further sign of seismic shifts in the political landscape with big gains for the left.

Ms Hanafin admitted: "When the tide is that strong against you, I couldn't swim against it."

Her and Ms Hanafin's losses were among several Fianna Fail dynasties brought to a dramatic end including Conor Lenihan, son of a former Tanaiste and brother of the outgoing finance minister.

Brian Lenihan survived to become the only member of Fianna Fail to win a Dublin seat, but his aunt Mary O'Rourke was defeated in Longford-Westmeath.

© Press Association