Negotiating teams from Fine Gael and Fianna Fail are to start “in-depth, detailed talks” as the Republic of Ireland’s leaders face pressure to accelerate government formation discussions.
The efforts to form a government take place as 34 cases of Covid-19 have been confirmed in the Republic.
On Tuesday, the leaders of Fianna Fail and Fine Gael said they held constructive discussions over the past two days about policy issues and the current political situation.
The two identical statements said that both Leo Varadkar and Micheal Martin are “acutely aware of the enormous challenges facing the country”, with the onset of Covid-19.
It said both parties will enter the talks as equal partners.
The meeting indicates Mr Varadkar’s party, Fine Gael, and opposition party Fianna Fail, which have dominated government since the foundation of the state, may be heading for the country’s first grand coalition.
This would effectively exclude Sinn Fein, which received the biggest share of the vote in February’s election from power.
There have been calls for a national interim government of all parties to deal with Covid-19.
On Monday, caretaker Irish Premier Mr Varadkar rejected the idea, stating it would require two changes of government.
“Having that disruption twice in the course of a few months would not be wise, quite frankly,” he said.
Sinn Fein met with the Green Party on Tuesday in a bid to form a government without Fianna Fail or Fine Gael but the arithmetic means such a government looks unlikely.
Both Mr Martin and Mr Varadkar have consistently ruled out going into coalition with Sinn Fein, citing the party’s left-wing economic policies and links to the IRA.
Speaking on Tuesday, Sinn Fein TD Pearse Doherty said a grand coalition between the two parties would not be the “government for change” that Irish people voted for.
“It is clear that Fine Gael and Fianna Fail want something different. They want to go back into power to stop that momentum for change. It is our job to continue to engage with other parties and independents to try and ensure that does not happen. That is the worst outcome that anyone could envisage from this election.”