Irish PM's coalition offer spurned

Ireland's second-largest political party has rejected a coalition offer from acting Prime Minister Enda Kenny, less than 24 hours after he made the unprecedented proposal to try to break a prolonged post-election deadlock.

The Fine Gael party's Kenny made the offer on Wednesday evening during his first meeting with the leader of historic rival Fianna Fail, almost six weeks after voters rejected his ruling coalition without choosing a clear alternative.

The rejection leaves the country facing the prospect of an unstable and potentially short-lived minority government led by one party and facilitated by the other, or a new election.

"The consensus view of the party was a reiterating of our consistent message that the best interests of the Irish people are not served by a government made up of Fianna Fail and Fine Gael," Fianna Fail leader Micheal Martin told reporters after a second meeting with Kenny that lasted just 10 minutes.

"We would support a Fine Gael-led minority government but Fine Gael need to also make it clear that they would facilitate a Fianna Fail-led government if the numbers added up."

Kenny, who insists his party would not back a minority administration led by its smaller rival, said in a statement that Martin's decision was a serious mistake and "driven by narrow party interests rather than the national interest".

The two centre-right parties differ little on policy but have been bitter foes for decades, tracing their rivalry back almost a century to Ireland's civil war.

"It is a disappointing outcome that Fianna Fail haven't even given a day of consideration to a really significant and historic offer. I can only think that's for political, strategic reasons," senior Fine Gael minister Simon Coveney said.

The impasse has so far had little effect on Europe's best-performing economy, which grew nearly 8 per cent last year, but consumer sentiment posted its sharpest fall in 17 months last month.