Padraig O hAolain, current chief executive of Udaras, admitted that in normal circumstances a state body should publicly advertise such contracts. "But you can't make a black-and-white rule to cover every situation. I wonder how many jobs in TDs' constituency office are subject to open competition, " said O hAolain.

He also said he had "a chat" last week with the Comptroller and Auditor General, John Purcell, over the contract.

The controversy erupted in the Dail last month when it emerged that former Udaras CEO Ruan O Bric, who left office in April 2005 two years short of retirement, was awarded a three-year contract seven months later worth 185,000 plus expenses to raise private funding for Irish courses in the Gaeltacht.

Under the arrangement, Udaras agreed to fund 60% of the cost of O Bric's contract, with NUI Galway picking up the balance.

The two jointly fund third-level Irish courses in the Gaeltacht.

Labour's Gaeltacht spokesman, Brian O'Shea, has asked Gaeltacht minister Eamon O Cuiv why the contract wasn't advertised and whether government procedures were followed. In a stinging letter to O hAolain last month, Seosamh O hAghmaill, assistant secretary at the Department of the Gaeltacht, said it was a matter of "grave concern" that the awarding of the contract breached 1998 guidelines governing the retirements or resignations of chief executives of state bodies. All decisions must be "fair, transparent and rooted in good practice", O hAghmaill said.

O hAghmaill looked for written assurances that Udaras would abide by procedures with regard to the retirements of all present and future chief executives.

O hAolain said he disagreed with the department's interpretation of the 1998 guidelines and said it was clear that O Bric, with all his experience, was the ideal person for the contract.

This is just one item costing Udaras 100,000 out of a total budget of 50m, he said. But he added that he had assured the department he will follow procedures in future.