The Irish Taoiseach Bertie Ahern is threatening to withhold almost £35m of government money from the FAI, unless it cancels the £4.8m deal with the Rupert Murdoch-owned broadcaster.
The £35m is the Irish government's contribution to the building of an Irish national stadium. The stadium is key to Ireland and Scotland's bid for the rights to stage Euro 2008 and, without the stadium, the bid could sink.
Ahern has threatened legal action to stop Sky's exclusive deal with the FAI, which effectively stops Irish fans watching games on free-to-air channels RTE and its commercial rival TV3. However, they will be allowed to broadcast Irish games an hour after they are shown on Sky.
In a statement from Dublin yesterday, the Taoiseach said: "Our position is that we believe the legal position is clearly on our side -- and, if we have to, we will impose that position. I am not trying to take any money away from the FAI -- the best of luck to them. They need money and have outlined to us their problems, which we acknowledge.
"The position for us is that we have a clear law in this country and a clear European Union directive. That means that the people of this country are entitled to watch major events free to air. If we are pushed to do that, we will impose it. The FAI will get their advice and Sky, I am sure, are not averse to taking a legal case. But I can see solutions to it."
In a statement, the FAI said the Sky offer was "too good to turn down". It plans to reinvest the £4.8m into Irish football, which is beset with debt problems and low attendance.
The Sky deal begins for Ireland's first European Championship qualifier with Switzerland in October.
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