Acting Taoiseach Enda Kenny's party has told Fianna Fáil that they "cannot live" with the idea of suspending charges.

But they are willing to "help families effectively abolish charges for themselves" and believe families will actually be incentivised to get a water meter.

Technical experts have now been drafted in to draw up figures for a "generous" free water allowance. The aim is to strike a balance between allowing people to 'beat the meter' and encouraging conservation.

"The plan will also encourage people to get meters installed because that is how families will be able to reduce their charges to zero," said a Fine Gael source.

After new welfare concessions and waivers for the elderly are factored in, it is estimated almost 40pc of homes won't pay.

But the plan has caused deep unease within Micheál Martin's party, with up to 12 TDs warning the party leader that they must stick to their pre-election promise to stop bills for the next five years.

Fianna Fáil are also furious with comments made by Finance Minister Michael Noonan who claimed there had been "a game-changer" in the talks.

The minister told reporters outside the so-called 'Trinity Talks' that Fianna Fáil had "moved away from the position of sending responsibility of Irish Water back to local authorities, and agreed to a national utility".

Fianna Fáil sources told the Irish Independent his statement was a "bizarre" and a "deeply unhelpful gaffe".

"To suggest there was a game-changer yesterday is wide of the mark. The claim is bizarre," a source said.

Fianna Fáil maintained they have not moved from their policy that a slimmed-down agency should replace Irish Water and service be given back to local authorities with knowledge on the ground.

The Irish Independent has also learned that Fianna Fáil came to the negotiating table with 29 'policy points' and that there are still unresolved differences in areas such as crime, childcare, health and education. Yesterday's discussions focused on housing.

No deadline has been set for the conclusion of the talks, but both sides have expressed an eagerness to have a deal done by early next week.

Several first-time Fianna Fáil deputies, including Mary Butler and Anne Rabbitte, spoke at a party meeting to urge the leadership to stick by the promises it made to voters.

A senior party source said: "The new TDs are nervous and will need to be reassured about a compromise. Micheál will have to do that."

A similar meeting of Fine Gael TDs gave its backing to the work of their negotiating team.

After talks ended last night, Fianna Fáil's Barry Cowen said: "People are saying this is taking a long time. I'd rather have an agreement we're all happy with so we can serve the people well."

Speaking for Fine Gael, Simon Coveney said: "There's a lot of people watching this process. And people are impatient with it. We're conscious of that and we're looking to close out that process over the next two days."