Tánaiste Eamon Gilmore has dismissed reports that Ireland is negotiating to avoid the need for a referendum on any closer European fiscal integration.

He told the European Affairs Committee that such activity would be ''wrongfooted'' and was distracting from the real issues at play.

Mr Gilmore said the only deal the Government would sign up to would be one that is in the best interests of our country.

He said a referendum would be held if required.

The Tánaiste said the latest draft of the treaty arrived here last night and would be made available to members of the committee.

Fianna Fáil's Timmy Dooley welcomed the circulation of the latest draft of the treaty text and said it demonstrated that the Government was engaging with the Oireachtas on the issue.

However, he said it was regrettable that the treaty had been floating around in various different forms since early this month.

Deputy Dooley called on the Tánaiste to engage more with the Irish people on the treaty and stressed the importance of not allowing the debate to fall into the hands of euro-sceptics.

Fine Gael's Bernard Durkan said the issue around a referendum should be cleared up as early as possible.

Sinn Féin's Kathryn Reilly called for clarity on where the 0.5% deficit target came from, which she referred to as a "draconian ceiling".

The latest draft of the fiscal compact showed that the European Union's highest court will be able to fine an EU country that does not adopt a balanced budget rule in its constitution with a penalty of up to 0.1% of gross domestic product.

Under the fiscal compact, all those who sign the treaty must within one year introduce into their constitution, or their equivalent law, a rule that the budget deficit cannot be higher than 0.5% of gross domestic product in structural terms.

If it does, automatic corrective steps would kick in.

The draft treaty also says that if a country ignores a ruling of the court to adopt the "golden rule" a fine would follow.

The draft is likely to be discussed by EU finance ministers next week and by EU leaders on 30 January.