Fine Gael is on the verge of sealing a deal with enough Independents to ensure Enda Kenny is re-elected as Taoiseach, possibly as early as tomorrow.
Talks between ministers and more than a dozen non-party TDs were continuing at Government Buildings late last night.
In the Dail, Mr Kenny said "a number of important matters" still had to be resolved but it was hopeful of a deal.
"Discussions are taking place with people who have an interest in actually participating in making arrangements to run the country. They are not taking place in a sense of virtual reality," he said.
It comes as Fianna Fail claimed a major victory after a series of their manifesto promises were transposed directly into the deal on a minority government.
Micheal Martin's TDs believe they are the most powerful opposition party ever and have delivered "massive value" for their votes.
Sinn Fein's Mary Lou McDonald criticised the agreement between the two parties, and said the most "alarming" feature was the lack of detail about health policies.
"It certainly looks like a programme for Government, although it is not to be called that as Fianna Fail attempt to both straddle government and opposition at the one and same time," she said.
However, the strongest criticism came from the Labour Party, whose TDs and senators met yesterday to discuss their position in the new Dail.
Afterwards, party chairman Willie Penrose said: "Narrow political self-interest has trumped fair play and sound policy, with compliant taxpayers squeezed in the middle in the deal hatched between Fianna Fail and Fine Gael."
He said the document was a "pre-nup for how this marriage of convenience will work" and hit out at the decision to place water charges at the centre of the deal.
"The 'solution' that the two parties have concocted for water charges is the clearest example in many a long day, as to how - to their shame - political expediency can win out over fair play.
"Unfortunately, it is honest compliant citizens - those who did the right thing by paying their water bills - who will lose out most under this plan," he said.
Meanwhile, the Dail spent yesterday debating agriculture and climate change.
Kerry TD Danny Healy-Rae claimed that mankind has had no impact on climate change and that "God above" alone is responsible for the weather.
The Independent deputy denied burning of fossil fuels was a root cause of global warming despite widespread scientific agreement that it is.
"(In the) 1840s we had the famine. We lost over three million people that time and we had no combustible engines then," he said.
"Climate change, I don't think mankind had any hand, act or part in."
Mr Healy-Rae hit out at the carbon tax based on car emissions and said it is "hurting the young fella going to work in the morning".
"I believe God above is in charge of the weather and that we here can't do anything about it," he added.
Acting Environment Minister Alan Kelly criticised Fianna Fail on climate change suggesting the party thought "pints with the people was more important".
The Tipperary deputy pointed out that the subject was left out in the party's deal with Fine Gael.
"The major issue now missing from this famous document is actually climate change. It's not in it. The global cause of a generation is missing from the famous document."
As Mr Kelly began his speech he noted that he was the only TD present.