Speaking after his election yesterday as the new chairperson of Labour Youth, Patrick Multy said "there is a strong consensus among Labour Youth delegates that the pact with Fine Gael is damaging Labour's chances of maximising its vote at next year's general election.

"We in Labour Youth feel that our party's position would be better served by an independent strategy which prioritises issues around workers' rights and social justice and not a pre-election pact with the Fine Gael party."

Meanwhile, Rabbitte made the keynote speech at Labour Youth's annual conference last night which was held in the student centre at UCD and was attended by under 100 delegates from across the country.

When asked if Labour Youth had lost confidence in the party leader, Multy replied: "We respect the democratic manner in which the decision to embark on the Fine Gael electoral pact was made. We have great respect for Pat Rabbitte but we believe that the pact is not the best way to maximise support in next year's election."

"I think that there is a great sense of optimism and confidence among delegates that the future of Labour is bright.

In the coming months we will be prioritising issues such as same sex marriage, US military out of Shannon and Shell to Sea."

Labour Youth's surprise move comes as a further knock to Rabbitte, who has been forced to deal with last week's loss of a third senior advisor in 18 months after Liam Cahill's decision to stand down as director of communications.

Cahill's departure follows the retirement earlier this year of Pat Magnier, the party's national organiser, and Fergus Finlay's resignation last year as chef de cabinet.

Both Cahill and Finlay were specifically recruited by Pat Rabbitte as part of his team of advisors in Leinster House.

Meanwhile, An Taoiseach Bertie Ahern refused to rule out a coalition agreement with Labour when he was interviewed at yesterday's Fianna Fail Ard Fheis . . .

putting Rabbitte's election pact into an even more precarious position with grasssroots Labour delegates.

Labour's hopes of forming a government with Fine Gael have been dealt several blows in recent opinion polls. In the most recent Sunday Tribune/Millward Brown IMS poll, Labour's share of the vote dropped two percentage points to 10%. This was the party's worst showing since Rabbitte became party leader.