The Tánaiste says she has gotten fresh legal advice that shows her reaction to an email regarding Maurice McCabe was appropriate.
Frances Fitzgerald has given a statement to the Seanad this evening regarding her handling of the affair.
Opposition TDs and Senators have criticised her lack of action on foot of the email, which detailed a dispute between the Garda legal team and Sergeant McCabe during the O'Higgins Commission in May 2015.
A transcript of the email was publicly released yesterday evening.
Frances Fitzgerald has insisted she only became aware of the details of an alleged Garda strategy to discredit Sgt McCabe when they came into the public domain a year after the email.
The Tánaiste - who was Justice Minister when she received the email - this evening said that legal advice she received today shows she did the right thing at the time.
Speaking in the Seanad chamber, Minister Fitzgerald said: "The position to be adopted before the O'Higgins Commission of Investigation was for the Garda Commissioner and her own legal team to decide.
"In fact, it would have been inappropriate and improper for me to have interfered."
She added: "I was always scrupulously careful about the lines I could not cross. I share the outrage that other members of this House expressed when I read about the alleged treatment of some whistleblowers - but as Minister of Justice and Equality, I always had to proceed on the principles of natural justice."
Earlier, Taoiseach Leo Varadkar said he is not satisfied with the information he has been given by the Department of Justice - and insisted he has confidence in the Tánaiste.
Fianna Fáil leader Micheál Martin questioned the Tánaiste's decision to do nothing, even though the e-mail said she had no function.
He told the Dáil: "What's at the heart of this is a terrible vista that an appalling set of actions were afoot to undermine this man's credibility and character.
"And it's simply not good enough, Taoiseach, to say that a minister in charge of a portfolio on the most explosive issue that has hit this Dáil in the last three years just merely stands by".
Sinn Féin says it will hold off on deciding whether to table a motion of no confidence in Frances Fitzgerald until after leaders’ questions tomorrow.
The party says it is still actively considering the motion - but wants to give the Tánaiste more time to answer questions it feels she has failed to answer so far.
Sinn Féin's deputy leader Mary Lou McDonald earlier said the controversy "calls into question [the Tánaiste's] fitness to remain in office".
Fianna Fáil is also holding its parliamentary party meeting this evening - but it is not clear if they’d be willing to withdraw support for the Government over the issue.
Labour, meanwhile, has said they will not support the Tánaiste if it comes to a confidence motion.
Reporting by: Juliette Gash, Stephen McNeice