Donegal County Council may have to be directly taken over by the Department of the Environment.

A three-day council meeting was suspended last night without a deal to agree a budget for 2014.

Fianna Fail and Sinn Fein are blocking a budget deal to protest the transfer of the water network to the new Irish Water company.

The budget was voted down by 15 votes to 12 - as Fianna Fail, Sinn Fein Fein and Independent Councillor John Campbell voted against it.

Councillors have agreed to one final meeting next Monday.

But if no budget is passed, the councillors will be sacked and the Department will take over the running of the Council.

Fianna Fáil councillor Seamus O'Domhnaill says the Council must be compensated for handing over the water network.