FORMAL contacts are likely to be made this week between Fianna Fáil and the Green party on the renegotiation of the programme for government amid signs that Fianna Fáil may be open to a reform of the system of corporate donations.

While there was initial communication between the two parties earlier in the summer, the process will only begin in earnest this week. It is likely to involve an exchange of documents and an initial meeting between Taoiseach Brian Cowen and environment minister John Gormley, before formal discussions between the two teams of negotiators get under way in the coming weeks.

Any renegotiation of the programme for government will require the endorsement of two-thirds of the Green membership at a special convention in early October. It is therefore accepted that the Green leadership, already under pressure from the grassroots over the Nama proposal, will need to show they obtained serious concessions during the negotiations.

The Green leadership is declining to be drawn on its wish-list but it is believed that a ban on corporate donations, education, the Dublin metro line and electoral reform are all key issues for the party.

There is speculation that Taoiseach Brian Cowen may be open to reform in the area of corporate donations, which may include measures to increase transparency as to who is making a donation.

"There is a view in Fianna Fáil – I wouldn't say it's universal – that it might be time to change and make a virtue out of a necessity," one close observer said.

Education is likely to prove a key sticking point in the negotiations. The proposed reintroduction of some form of third-level fees – about which Green TDs are particularly concerned – is also likely to form part of the negotiations.

Informed government sources believe it should be possible to satisfy Green concerns on Nama and note that any move by Nama-sceptics in the party to force the leadership to vote against the legislation will require a two-thirds majority, which they are highly unlikely to achieve.

However, the sources accept that in turn it will be difficult for the leadership to secure two-thirds support for the programme for government.

Against that, sources close to both parties stress the good relationship that exists between them..

"You can't make any assumptions but the chemistry is good," one said.