The High Court's ruling limiting the scope of Oireachtas investigations is to be appealed to the Supreme Court next week by the Attorney General.
Meanwhile, the Minister for Justice, Mr O'Donoghue, has said he would set up a tribunal into the killing of Mr John Carthy in Abbeylara, Co Longford, if the Supreme Court challenge fails.
The three judges last Friday upheld a challenge by 36 members of the Garda emergency response unit against the way in which the inquiry has conducted its work.
Oireachtas investigations cannot make "findings of fact or expressions of opinion" that damage the good name of citizens who are not TDs or Senators, the judges found.
The Attorney General, who studied the 94-page ruling over the weekend, briefed the Cabinet on its implications during its meeting yesterday.
The members of the inquiry committee also decided to appeal following a briefing by one of their senior counsel, Mr Frank Clarke.
Papers will not be lodged in the case until "late next week", said the inquiry's chairman, Fianna Fβil TD Mr Sean Ardagh.
He added that the subcommittee would meet again next Tuesday. The subcommittee will not be able to take evidence or continue any other work until the issue can be argued before the Supreme Court, he said.
The Taoiseach, Mr Ahern, told the Dβil the Attorney General believed that some parts of the judgment would "create difficulties" for the Oireachtas and for its committees.
A Government spokesman said Mr McDowell's focus was on the ruling's first declaration, that Oireachtas committees cannot make findings that affect the reputations of ordinary citizens.
The Minister for Justice said he made it clear "at all times" that he would set up a tribunal into the Carthy killing if that proved to be necessary.
The Carthy case differed from the McBrearty affair and other issues because it happened recently, there was no dispute about the basic facts and there were no outstanding civil or criminal proceedings.
Last night, a Department of Justice spokesman insisted that the Minister's statement did not reflect any lack of confidence about the Supreme Court's appeal.
"He does not want to do anything that would prejudice or jeopardise any possible appeal.
"He simply wants everyone to be assured, particularly the Carthy family, that this will be looked into."
The Director of the Irish Council of Civil Liberties, Mr Donncha O'Connell said the Minister should set up a tribunal regardless of the Supreme Court's appeal.
There was "a broad consensus", which included the Garda Representative Association, that a tribunal headed by a judge was the best way to investigate the case.
"There is, therefore, no reason for the Minister to make his offer conditional upon future resolution of questions regarding the parliament's power to investigate and make findings of fact.
"There will still be a role for the subcommittee to consider the findings of fact made by a judicial tribunal with a view to formulating recommendations regarding wider policy issues," said Mr O'Connell.
Labour TD Mr Pat Rabbitte urged that the appeal be taken as quickly as possible because the work of all Oireachtas committees would fall with the ending of this Dβil.
"It is imperative in the short window between now and a general election that whatever action is to be taken in the Four Courts be taken as speedily as possible," he told Mr Ahern.
