A Garda whistleblower has described the sacking of the force's confidential recipient as disturbing.
Retired officer John Wilson called for an independent investigation into the dismissal of Oliver Connolly, a lawyer who was appointed to hear complaints of malpractice from serving gardai.
The sacking - announced in the Dail - follows reports Mr Connolly told another whistleblower he was "finished" if Mr Shatter thought he was being "screwed" over claims of rogue policing.
Father-of-three Mr Wilson, who was central to exposing the penalty points scandal, said Mr Connolly was being scapegoated.
"I met Mr Connolly on a number of occasions and I found him in all occasions to be a decent and honourable man," he said.
"I am very disturbed at the manner of his dismissal.
"As confidential recipient, he couldn't investigate the allegations that members of the Garda Siochana had made. He was purely the postman."
Mr Wilson added: "I believe there is a very unhealthy relationship that exists between Garda Commissioner Martin Callinan and Mr Shatter."
Mr Connolly was appointed in 2011.
His dismissal is the latest in a long line of controversies dogging the Garda and Mr Shatter.
The Taoiseach told the Dail that a report had been written by the secretary general of the Department of Justice amid publication of extracts from the meeting between Mr Connolly and Garda whistleblower Sgt Maurice McCabe
A full transcript has since been leaked.
Mr Kenny said a number of discussions have been held with Mr Connolly over the allegations in the last two weeks.
"Following publication of the full element of what is alleged to have happened, I did not have the opportunity to listen to audio tape personally, having read all the statement made having been in contact with the Minister for Justice, who's very concerned about this, he has this morning relieved Mr Connolly of his duties," he said.
Independent TD Mick Wallace had also used parliamentary privilege to detail another section of the transcript from a conversation allegedly held in a cafe in Dublin on February 9 2012.
He said Mr Connolly told Mr McCabe: "If Shatter thinks 'here's this guy again, trying another route, trying to put on pressure', he'll go after you."
Mr Wilson described the conversation as "very, very disturbing" and urged an independent inquiry into the claims.
"I met Mr Connolly on a number of occasions, and on each occasion he let his connection to Mr Shatter be known," he said.
"He assured me that he would bring my concerns to the highest levels in government, referring to Mr Shatter.
"He made no secret of his friendship with Mr Shatter."
Sgt McCabe has provided a report to a number of TDs over alleged abuse of the garda penalty points system and in the last month gave evidence in private to a parliamentary committee on the issue.
The office of the confidential recipient was set up in the wake of the Morris Tribunal into garda corruption in Donegal.
It was designed to offer officers or civilian members of the force with concerns a route to alert an intermediary to malpractice or corruption in the force without concerns their identity would be revealed.
Former junior minister Lucinda Creighton took to Twitter to express her concerns: "This is turning into a fully blown crisis."
Retired garda Mr Wilson also dismissed plans for a High Court judge-led inquiry into allegations the headquarters of the force's official watchdog, the Garda Siochana Ombudsman Commission (Gsoc), was bugged.
"We need a full independent inquiry with powers of compellability," he said.
Verrimus, the UK-based counter-surveillance company who carried out a sweep of the Gsoc offices in central Dublin, said it has been "reminded" it can not discuss operational details, findings or evidence about its work.
"As there is now scheduled, what we hope is a thorough and robust judicial review, it would be inappropriate for Verrimus to continue to provide such technical threat advice to the media via statements," the company said.
"We stand by the evidence in our original report to Gsoc, supplemental reports and the signed investigation log and evidence compiled by Gsoc and Verrimus operators during the investigation."