Charles Haughey after telling the tribunal his recollection was "diffused"

Haughey May Face Prosecution Over Payments

The financial gifts were not illegal, but Mr Haughey has been heavily criticised for his behaviour toward the tribunal, and may face prosecution for initially denying any knowledge of the affair. He faces a possible two year jail sentence and a £10,000 fine.

Mr Haughey admitted accepting the money - totalling more than £1 million - when he gave evidence to the tribunal looking into the matter last month. The gift came from supermarket millionaire businessman Ben Dunne.

In his report the tribunal judge said he "didn't believe much of what Mr Haughey had said on oath."

The report has not settled controversy over political payments

The Tribunal ruled that Mr Haughey's initial denial that any such payment had been made could have constituted an offence.

A report has been sent to the country's Director of Public Prosecutions. It said he had failed in his obligations to the citizens of Ireland.

The Irish Prime Minister Bertie Ahern said he was deeply dismayed by the findings, and that Mr Haughey had "fallen short of the ideals of honesty, truthfulness and integrity that are the fundamental requirements of all those who serve in public life". Mr Ahern - a one-time protege of Mr Haughey's - has responded by making a statement that a further inquiry will be launched. He made it clear that what was at stake was Ireland's good name.

The 71-year-old former taoiseach has come in for strong criticism in the report of the tribunal, headed by an Irish High Court judge, Brian McCracken.

Prime Minister Ahern: further inquiries needed

The report failed to find any connection between payments made by Mr Dunne to politicians and political favours. It concluded, however, that Ben Dunne was "an impetuously generous person."

But Judge McCracken raised grave questions about the tax implications if Mr Haugh did not declare the gift for tax purposes - the implication being that he did not.

The tribunal also found that it was unnacceptable for a man of Mr Haughey's standing and power to receive gifts from a prominent businessman. It was found to be even more unacceptable the Mr Haughey's entire lifestyle was dependant on such gifts.

Deputy Prime Minster, Mary Harney, said there is a need for a further inquiry - particularly with the possibility of other 'benefactors': "We need to find out just who these people were. I'm sure they weren't all as benign as Mr Dunne. The judge said that Mr Dunne's behaviour was bizarre. If other people were supporting this lavish lifestyle over long periods of time we have to know who they are, why they were doing it and did they get any benefits in return."

The tribunal was established earlier this year after the resignation of a cabinet minister, Michael Lowry, following reports that he had received more than £200,000 from Mr Dunne to finance a house extension.

Subsequently, there were allegations about other top politicians, most notably Mr Haughey.