Fianna Fail is prepared to put Enda Kenny and Joan Burton back into government despite campaigning to bring down their Fine Gael-Labour coalition.
Micheal Martin has said if a deal can be struck with Fine Gael on a minority government he will not object to the Labour Party being part of it.
In advance of negotiations between the parties resuming today, Mr Martin said: "We've made every effort to provide for an alternative government.
"It's very clear to us after three votes in the Dail that it's not possible to put forward such an alternative government.
"In that context, we are willing to facilitate a Fine Gael-led minority government, which is Fine Gael plus others.
"It's not for us to dictate the composition of that government in terms of who forms part of the Cabinet."
Labour Party sources told the Herald that they were preparing to talk with Fine Gael about being part of a minority government - but only if they fail to strike a deal with Independents.
Speaking at his party's 1916 commemorations in Arbour Hill yesterday, Mr Martin also said his party would be raising the issue of water charges when they meet with Fine Gael.
He said they had been "very clear from the beginning, before the election, during the election and after the election that it's a very important issue for us".
"It's a very important issue to a majority of TDs in the House now and obviously that will feature in the talks."
Despite being asked three times whether he would compromise on the issue or demand the full abolition of charges, Mr Martin refused to make any commitment.
"I'm not going to pre-empt the talks. I think we need to create a bit of space for those involved but it is a very, very important issue for us," he said.
Mr Martin also rejected a claim by Shane Ross of the Independent Alliance, who said that the Fianna Fail boss wasn't serious about getting enough support for a Fianna Fail-led government.
"The Independents have to say something to justify their position," said Mr Martin.