Despite issuing an immediate on-air apology to Cullen and Leech, RTE has decided to contest the libel case. Legal observers say the minister and his former advisor have an "open-and-shut case".

Defending the action is likely to cost the national broadcaster thousands of euro in licence payers' money.

RTE has not made any settlement offer to Leech or to Cullen. Leech, a public relations consultant, is believed to be seeking substantial damages and will take her case to the High Court after Easter.

The transport minister is not expected to pursue his separate case until after the next general election. However, Cullen is understood to be determined to go after RTE for what he considers was a highly damaging remark against his character.

The hoax caller to Joe Duffy's Liveline programme posed as a PD supporter and made lewd suggestions about Cullen and Leech before he was cut off. Despite apologising for the incident, RTE's legal department immediately received correspondence from solicitors representing Cullen and Leech.

RTE's director general, Cathal Goan, later said the station had no plans to introduce a delay mechanism for contributors to live phone-in programmes.

Cullen and Leech hit the headlines in 2004 when it emerged that Leech, a political supporter of Cullen in Waterford, was receiving 800 a day for consultancy advice at the Department of the Environment where Cullen was then a minister.

Leech is also suing other newspapers for improper suggestions over the nature of her relationship with the Fianna Fail politician.