It now appears the deal between the two parties will be done today or tomorrow
Fine Gael and Fianna Fáil are holding meetings of their TDs to discuss a potential deal on Irish Water.
The reported deal would see the utility made a state body with charges suspended for a number of years.
Negotiating teams from the two parties have been working on new proposals in relation to the future of the controversial utility.
It is believed that both parties have agreed to put a hold on water charges, until a new system with generous allowances is put in place.
It is understood that would change it to a public utility, rather than a commercial one.
Fine Gael and Fianna Fáil are due to continue negotiations today, and it now appears the deal between the two big parties will be done today or tomorrow.
A Fianna Fáil source said it was a 'good meeting' - but added that many TDs are seeking a 'firm' stance on the future of Irish Water.
Sinn Féin says any deal that results in water charges being retained would be the 'ultimate betrayal' of Irish voters.
Pearse Doherty says 99 TDs were elected on platforms to abolish water charges, including Fianna Fáil - but this will not be delivered.
Speaking to Newstalk Breakfast earlier, Labour's Willie Penrose said that, as well as a referendum on public ownership of Irish Water, he would also like any future water charges to reflect people's ability to pay.
"I think those are issues that can be addressed in the context of any negotiations, and we would be supportive," he added.
Green Party leader Eamon Ryan said he hopes any deal would allow for the formation of a government - adding that the introduction of a basic allowance for water would be particularly welcome.
"It's a good sign - I think we'll probably get a government at long last next week, hopefully," he said.
Meanwhile, it appears the Independent Alliance is moving closer to agreeing a coalition deal with Fine Gael.
TD John Halligan says he is nearing his demand of a 24-hour cardiac service in Waterford.
Deputy Halligan said he has agreed to an independent review, with hospital consultants believing the review should result an ambulance service guaranteed for University Hospital Waterford: