Updated at 3.30pm:

DONEGAL NORTH EAST TD Jim McDaid has resigned his seat in the Dáil, saying he believes a general election is in the best interest of both Fianna Fáil and the government.

The Ceann Comhairle informed the Dáil of McDaid’s resignation this afternoon.

Speaking to Highland Radio this afternoon, McDaid said that he didn’t believe there would be any by-election, saying: “there will be a general election”.

He voiced his concerns over the cost of Ireland’s borrowing and the impact of political stability on the markets: “Can you imagine us going to the bond market at the same time as having a general election?”

McDaid said he believes Ireland should hold its general election before the budget.

The “path of least resistance”

RTÉ reports that in an email, McDaid referred to a letter he sent to the Taoiseach last week in which he said that after two years, the government has failed to “make any significant progress in relation to reducing our structural budget deficit”.

The letter continues:

Where decisions have been made, they have invariably pursued the path of least resistance, focusing on what is politically possible rather than what is economically necessary.

Why should we have to abandon major infrastructure projects and cut frontline services in our hospitals just to keep public sector pay numbers at grossly inflated levels. Why? Because it is the option that is least likely to de-stabilise the Government.

I am a citizen first and a member of Fianna Fáil second.

He said he received no response to that letter.

A month ago, McDaid threatened to withdraw his support for the government vote if it continued “to implement the cutbacks at Letterkenny General Hospital”.

Government majority

Government sources told RTÉ this morning that they were not relying on McDaid’s vote and remain confident of retaining a majority in the Dáil, although that now stands at 82:79.

Oireachtas officials have not confirmed that the resignation was received, but McDaid is understood to have transmitted it to the Dáil clerk.

McDaid has been outside of the Fianna Fáil parliamentary party since disagreeing with the government on their cervical cancer policy. He abstained from a vote on the cervical cancer vaccination programme in 2008, according to the Irish Times.

Junior minister Conor Lenihan told Pat Kenny on RTÉ Radio One this morning that McDaid’s decision was a personal decision made by him.

Lenihan said he has no idea as to why McDaid has resigned, describing his former colleague as “a very committed person, both to his constituents and to his job. He’s not the sort of person who would give or make a half effort at a job if he felt he wasn’t going to make a contribution.

Lenihan said the resignation would “certainly make the numbers very tight for us”. However, he said that “some of the best decisions” have been made by governments who needed independents to hold the majority, “so it’s not the case that a narrow scene is a recipe for instability”.

McDaid’s resignation now means there are four vacant seats in the Dáil. The High Court is due to rule tomorrow on a challenge to the government’s delay in holding a Donegal by-election.

Sinn Féin Senator Pearse Doherty, who has been nominated as his party’s candidate to contest the Donegal South West by-election, brought the challenge. He argues that under constitutional requirements, there should not be less than one TD for every 30,000 people and says people in the Donegal constituency are currently under-represented.