Minister for the Environment Alan Kelly has said he would not rule out holding a referendum to ensure Irish Water stays in public ownership.

He told the Seanad today he appreciated what the House had decided earlier calling for a referendum.

“I will bring it to Government, the Taoiseach and Tánaiste in particular,” he added. “I am not going to rule out that is necessarily the road we should go.”

He was speaking after Labour Party Senators voted with the Opposition and against their Coalition partners Fine Gael on holding a referendum to ensure Irish Water stays in public ownership.

Following heated exchanges in the Seanad in advance of an address by Mr Kelly on water charges, the Government lost the vote by 37 to 15.

The Government has on a number of occasions lost a vote in the Upper House when Labour Senators have abstained. This is, however, the first time Labour Senators openly supported the Opposition on a vote.

Mr Kelly said the development was something that had to be digested and was not a decision could be made quickly. The Minister’s remarks contrasted with what Taoiseach Enda Kenny said yesterday when he ruled out a referendum.

Mr Kenny ruled out a vote on the privatisation of Irish Water. “It is not proposed to hold a referendum in respect of a right to water being enshrined in the Constitution,” he told the Dáil, adding that any party that favoured privatisation could put in its election manifesto “that it stands for that”.

He said that that clarity would be brought to the issue of charges quickly but it was something that would have to be right.

Loss of the Seanad vote represents further embarrassment for the Government which has been convulsed by the controversy over the operation of Irish Water. The House voted to accept a Fianna Fáil motion which stated: “That Seanad Éireann requests the Government to initiate legislation to provide for a constitutional referendum to enshrine the ownership of Irish Water to the Irish people in perpetuity.”

The Seanad was later adjourned for 15 minutes after Opposition Senators protested that they did not have enough time to debate water charges.

When Cathaoirleach Paddy Burke called on Mr Kelly to respond to the debate, Independent Senator Fidelma Healy-Eames complained that she did not get an opportunity to speak.

Fianna Fáil Seantor Brian Ó Domhnaill said the Government did not want to hear what the people were saying.

Meanwhile in the Dáil Mr Kenny said he agreed with Tánaiste Joan Burton that water charges should be affordable and fair.