Hilary Quinlan has resigned from the board of the semi-State company Irish Water.

His decision follows reports today that the Minister of State at the Department of the Environment had hired him as his personal driver.

It is understood Mr Quinlan cited the perception of a possible conflict of interest as reason for his resignation.

The appointment of Mr Quinlan, then a Fine Gael councillor in Waterford, to the board of Irish Water in November 2013 was approved by Phil Hogan, then minister for the environment, and Pat Rabbitte, then minister for communications. Mr Quinlan is paid a €15,000 annual fee for the position.

From Fiach Kelly via Twitter It's understood Hilary Quinlan cited the perception of a possible conflict of interest as reason for resignation from @IrishWater — Fiach Kelly (@fiachkelly) September 30, 2014

Mr Quinlan lost his Waterford city seat in the local elections last May and has since been hired as a ministerial driver by Paudie Coffey, the junior minister at the Department of the Environment, a job which pays €665 a week. He is also entitled to a €57,757 gratuity payment after losing his seat.

Mr Coffey is a Fine Gael TD for Waterford and was promoted to the junior ministerial ranks in the reshuffle last July.

The Department of the Environment is responsible for Irish Water, and Mr Coffey is one of two ministers in the department, alongside Labour’s Alan Kelly, the senior Minister.

Tánaiste and Minister for Social Protection Joan Burton said this afternoon that she expects Mr Coffey will “very soon” make a statement on the issue.

Talking to reporters in Dublin, she said she had never before heard of a minister appointing as a driver a person who was a director of a semi-state company for which the minister had responsibility.

“But this is a matter for the Minister to address in due course.”