It is understood tonight that Fine Gael's Seanad by-election candidate has agreed to resign the seat if he wins when the result is announced tomorrow.

John McNulty had already called on TDs and Senators not to vote for him - but that withdrawal from the race came after the ballot papers had already been printed.

McNulty's candidacy became embroiled in controversy when it emerged he was appointed to a state board that he would have to resign from if elected.

Last week he effectively withdrew from the race by calling on the TDs and Senators who have a vote not to vote for him, but the ballot papers were already printed with his name and some were even returned.

It's now understood that after meetings with Fine Gael party officials this week, Mr McNulty has agreed to resign the seat if he is declared the winner when the result is announced tomorrow afternoon.

That will then spark a fresh by-election and Fine Gael will be able to put forward a new candidate who will win because of the Government numbers, therefore restoring the coalition's majority in the upper house.