Taoiseach Leo Varadkar is digging in behind Denis Naughten and insisting the under-fire minister will be free to rule on future media mergers despite mounting questions over his judgment.

However, Labour Party Leader Brendan Howlin said Mr Naughten should be stripped of his powers until he admits he made a "serious error in judgment".

The minister was forced to address the Dail last week after it emerged he discussed the proposed takeover of Celtic Media by Independent News and Media (INM) with a lobbyist representing the newspaper group.

Mr Naughten faced calls to recuse himself from any role in media regulation after a conversation with former government press secretary Eoghan O Neachtain emerged in a High Court affidavit lodged by the Office of the Director of Corporate Enforcement (ODCE).

But yesterday, the Taoiseach said he has "absolute confidence" in his minister and insisted he will be allowed to continue overseeing media regulation in this country.

"Fundamentally let's not forget that Denis Naughten didn't do a favour for anyone, he didn't do a favour for INM, he didn't do a favour for Denis O'Brien," he said.

"All he did is what he should have done as minister which was to follow the law and to be guided by his official advice and delayed the merger by referring to the Broadcasting Authority of Ireland (BAI)," he added.

However, Mr Howlin said Mr Naughten does not believe he did anything wrong and for that reason should not have the responsibility for media regulation.

"Unless he acknowledges what happened was entirely wrong and undertakes that it won't happen again, you can't have confidence in his independence in future positions of this nature," he told the Sunday Independent.

Last week Mr Naughten admitted he took a call from Mr O Neachtain who was working for INM in November 2016 during which he expressed a "personal view" that a proposed takeover of the regional newspaper group Celtic Media by INM was likely to be referred to the Broadcasting Authority of Ireland (BAI).

As part of its application to have inspectors appointed to investigate corporate governance issues at INM, ODCE alleges Mr O Neachtain briefed his colleague Nigel Heneghan on the phone call. In turn, Mr Heneghan emailed INM's then chairman Leslie Buckley, alerting him to the minister's thinking. The State's corporate watchdog claims Mr Buckley forwarded this message to INM's biggest shareholder, Denis O'Brien, in a move that may amount to disclosing "inside information" and potentially a breach of stock market rules.

Mr Varadkar also said he would like to have "much more diversity" in Irish media.

"I think we could have much better media in this country but I don't think it's about one particular media group or one particular individual," he said.

"The questions arises at what point do you say that ownership is not diverse enough. We have RTE, for example, which is State owned, but is very dominant in the broadcasting space.

"Are they too dominant for example and the same thing applies to radio stations and print. At what point is it too much," he added.

Sunday Independent