Water charges could be suspended under a new deal reportedly being considered by Fine Gael and Fianna Fail.

The Irish Times reports that both parties have agreed to put a hold on water charges, until a new system with generous allowances is put in place.

It's understood that would change Irish Water to a public utility, rather than a commercial one.

Negotiators from Fine Gael and Fianna Fail are due to resume talks again later, as water charges remain the biggest obstacle to a deal.

The Anti Austerity Alliance TD and anti water campaigner Paul Murphy believes Fine Gael lost seats in the last election - because the public don't agree with Irish water.

Negotiating teams from Fine Gael and Fianna Fáil met for barely two hours yesterday - but still declared the talks to be moving in the right direction.

The status of those talks will be high on the agenda when the Fine Gael parliamentary party holds its weekly meeting in Leinster House today.

Engagement between the two sides was due to continue overnight - and could result in TDs being asked to approve the negotiation team’s plan of action today.

If the work has gone well, TDs *could* even be presented with the general outline of a compromise proposal, which could then be put to Fianna Fáil.

If that happens, TDs could be left in a difficult position - twice since the election, including only last week, they have affirmed their commitment to Irish Water and water charges - and an embarrassing climbdown may be the price of a deal.